Download CBSE Class 12 Accountancy Useful Resources
Explore structured advanced study materials through the CBSE Class 12 Accountancy Accounting For Partnership Firms Important Questions Set 02. Tailored for Class 12 learners, utilizing these Accountancy resources ensures thorough preparation and strengthens foundational knowledge before final CBSE evaluations.
Access CBSE Study Guides and Summaries
Access the complete useful resource PDF for Class 12 Accountancy below. Regular practice with these targeted academic notes builds familiarity with complex topics and helps secure higher marks in final school evaluations.
Very Short Answer Questions (1 Mark)
Question 1. Would a "charitable dispensary" run by 8 members be deemed a partnership firm? Give reason in support of your answer. [CBSE (AI) 2011]
Answer:
The 'charitable dispensary' cannot be considered a partnership firm because there should be a business and sharing of profits among partners in a partnership firm.
Teacher's Note:
1. Business with a profit motive and sharing of profits are both essential elements of partnership.
Question 2. When the partners' capitals are fixed, where will the drawings made by a partner be recorded? [CBSE Delhi 2013]
Answer:
In case of fixed capitals, drawings made by partners will be recorded on the debit side of partners' current accounts.
Teacher's Note:
1. Only permanent withdrawal of capital is debited to a fixed Capital Account.
Question 3. Name the method of calculating interest on drawings of the partner if different amounts are withdrawn on different dates. [CBSE Delhi 2012]
Answer:
Product Method.
Teacher's Note:
1. Multiply each amount by the months it remains outstanding and charge interest on the total of products for one month.
Question 4. Can a partner be exempted from sharing the losses in a firm? If yes, under what circumstances? [CBSE Delhi 2009]
Answer:
Yes, if partnership deed provides so.
Teacher's Note:
1. Such a partner's share of loss is borne by the other partners in the agreed ratio.
Question 5. State the provisions of Partnership Act 1932, in the absence of a partnership deed regarding (i) Interest on partner's Drawings (ii) Interest on Advances other than Capital. [CBSE (F) 2011]
Answer:
(i) No interest will be charged on partners' drawings.
(ii) Interest will be given at the rate of 6% p.a. if a partner advances loan to firm.
Teacher's Note:
1. 6% on a partner's loan is payable even in a year of loss.
Question 6. Give two circumstances under which the Fixed Capitals of partners may change. [CBSE Delhi 2009; (AI) 2009; (F) 2009]
Answer:
(i) Addition to capital
(ii) Withdrawal of capital.
Teacher's Note:
1. Both are permanent changes; regular drawings do not affect fixed capital.
Question 7. Mention a case where Profit and Loss Appropriation Account will not be prepared.
Answer:
If a firm incurs losses during the year and there is no profit to be appropriated. At that time Profit and Loss Appropriation Account will not be prepared and the losses will be distributed through Profit and Loss Account.
Teacher's Note:
1. Appropriations such as interest on capital and salary need profits; a loss is simply shared in the agreed ratio.
Question 8. What is meant by unlimited liability of a partner? [CBSE Delhi 2010]
Answer:
It means the personal assets of a partner may also be used for the payment of debts of the firm.
Teacher's Note:
1. Liability is also joint and several: creditors can recover the whole debt from any partner.
Question 9. Why is it necessary to have partnership deed? [CBSE Delhi 2009]
Answer:
(i) It helps in solving partners' mutual conflict.
(ii) It helps in smooth functioning of business.
Teacher's Note:
1. The deed records the agreed terms on capital, profit ratio, interest, salary and so on.
Question 10. Anna and Bobby were partners sharing profits and losses in the ratio of 5 : 3. On 1st April, 2014 their Capital Accounts showed balances of ₹3,00,000 and ₹2,00,000 respectively. Calculate the amount of profit to be distributed between the partners if the Partnership Deed provided for Interest on Capital @ 10% p.a. and the firm earned a profit of ₹45,000 for the year ended 31st March, 2015. [CBSE (AI) 2016]
Answer:
Profit of ₹45,000 is not adequate to pay Interest on Capital which is ₹50,000 – Anna ₹30,000 and Bobby ₹20,000. Profit of ₹45,000 will be credited to their respective Capital Accounts in the ratio of ₹30,000 : ₹20,000, i.e., 3 : 2. Thus, Anna will get ₹27,000 and Bobby will get ₹18,000.
Teacher's Note:
1. When profit is insufficient, divide it in the ratio of interest on capital, not in the profit sharing ratio.
Question 11. What share of profits would a "Sleeping Partner" who has contributed 75% of the total capital get in the absence of a deed? [CBSE Delhi 2011]
Answer:
Every partner including sleeping partner will get equal share of profit in the absence of a deed.
Teacher's Note:
1. Capital contribution does not decide the profit share when there is no deed.
Question 12. A Partnership Deed provides for the payment of interest on capital but there was a loss instead of profit during the year 2010-11. At what rate will the interest on capital be allowed? [CBSE (AI) 2012]
Answer:
There will be no interest on capital allowed as there is a loss instead of profit during the year.
Teacher's Note:
1. Interest on capital is an appropriation, so it is allowed only out of profits unless the deed says it is a charge.
Question 13. Kajal, Neerav and Alisha are partners in a firm sharing profit in the ratio of 3:2:1. They decided to admit Rajan, their landlord as a partner in the firm. Rajan brought sufficient amount of capital and his share of goodwill premium. The accountant of the firm passed the entry of rent paid for the building to Rajan in 'Profit and Loss Appropriation Account'. Is he correct in doing so? Give reason in support of your answer. [CBSE (AI) 2015]
Answer:
No, accountant of the firm is not correct in doing so. Because rent paid is a charge against the profit and not an appropriation of profit so it should be debited to Profit and Loss Account.
Teacher's Note:
1. Rent to a partner remains an expense even after he becomes a partner.
Question 14. A and B are partners. The net divisible profit as per Profit and Loss Appropriation Account is ₹2,50,000. The total interest on partners' drawing is ₹4,000. A's salary is ₹4,000 per quarter and B's salary is ₹40,000 per annum. Calculate the net profit/loss earned during the year. [CBSE Sample Paper 2017]
Answer:
Net Profit during the year = Divisible profits + Salary to partners − Interest on Drawings
= 2,50,000 + 16,000 + 40,000 − 4,000 = ₹3,02,000
Teacher's Note:
1. Working backwards: add back appropriations (salary) and deduct interest on drawings, which had increased divisible profit.
Question 15. How is debit balance of a partner's current account dealt with?
Answer:
Debit balance of a partner's current account would indicate that the partner has withdrawn in excess of what was due to him. So, it will be shown on the assets side of balance sheet.
Teacher's Note:
1. A credit balance of a Current Account is shown on the liabilities side.
Short Answer Questions (2 Marks)
You are required to make necessary corrections in books of accounts of Mona, Nisha and Priyanka by passing an adjustment entry. [CBSE Delhi 2013]
Answer:
Journal Entry
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Priyanka's Capital A/c ...Dr. To Mona's Capital A/c To Nisha's Capital A/c (Being adjustment entry passed) | 15,000 | 7,500 7,500 |
Working Notes:
(i)
| Particulars | Mona (₹) | Nisha (₹) | Priyanka (₹) | Total (₹) |
|---|---|---|---|---|
| Profit wrongly credited in 1:1:2 now debited | 22,500 | 22,500 | 45,000 | 90,000 |
| Profit should be credited equally | 30,000 | 30,000 | 30,000 | 90,000 |
| Net Effect | (Cr.) 7,500 | (Cr.) 7,500 | (Dr.) 15,000 | – |
(ii) Total Profits = Profit of 1st year + Profit of 2nd year + Profit of 3rd year = ₹15,000 + ₹25,000 + ₹50,000 = ₹90,000
Teacher's Note:
1. Without a deed, profits are shared equally and no partner gets extra profit for looking after the business.
Question 17. A, B and C were partners in a firm sharing profits in the ratio of 2:3:5. A was guaranteed a minimum profit of ₹1,00,000. Any deficiency on this account was to be borne by C. The net profit of the firm for the year ended 31st March, 2017 was ₹4,50,000. Prepare the Profit and Loss Appropriation Account of A, B and C for the year ended 31st March, 2017. [CBSE (F) 2007]
Answer:
Ans. A will get ₹1,00,000, B will get ₹1,35,000, C will get ₹2,15,000
Working: Shares 2 : 3 : 5 = 90,000; 1,35,000; 2,25,000. Deficiency of A = ₹10,000, borne entirely by C (2,25,000 − 10,000).
Teacher's Note:
1. Only C bears the deficiency because the guarantee was given by C alone.
Short Answer Questions (3 Marks)
| Dr.Cr. | |||
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Depreciation on Furniture A/c | 1,000 | By Gross Profit b/d | …… |
| To Bad Debts A/c | 500 | ||
| To Manager's Commission A/c (16,500 × 10/110) | 1,500 | ||
| To …… | …… | ||
| 18,000 | 18,000 | ||
| Dr.Cr. | |||
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Interest on Capitals: A …… B …… | …… | By P & L A/c | 15,000 |
| To B's Salary A/c | 3,000 | ||
| To Profit transferred to Partners' Capital A/cs: A 2,400 B 1,600 | 4,000 | ||
| 15,000 | 15,000 | ||
| Dr.Cr. | |||||
| Particulars | A (₹) | B (₹) | Particulars | A (₹) | B (₹) |
|---|---|---|---|---|---|
| To Drawings A/c | …… | …… | By …… | …… | …… |
| To Balance c/d | 51,400 | 31,600 | By Interest on Capital A/c | 5,000 | 3,000 |
| By B's Salary A/c | — | …… | |||
| By Profit & Loss Appr. A/c | …… | …… | |||
| 57,400 | 37,600 | 57,400 | 37,600 | ||
Answer:
Profit and Loss Account
| Dr.Cr. | |||
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Depreciation on Furniture A/c | 1,000 | By Gross Profit b/d | 18,000 |
| To Bad Debts A/c | 500 | ||
| To Manager's Commission A/c (16,500 × 10/110) | 1,500 | ||
| To Profit transferred to P & L App. A/c | 15,000 | ||
| 18,000 | 18,000 | ||
Profit and Loss Appropriation Account
| Dr.Cr. | |||
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Interest on Capitals: A 5,000 B 3,000 | 8,000 | By P & L A/c | 15,000 |
| To B's Salary A/c | 3,000 | ||
| To Profit transferred to Partners' Capital A/cs: A 2,400 B 1,600 | 4,000 | ||
| 15,000 | 15,000 | ||
Partners' Capital Accounts
| Dr.Cr. | |||||
| Particulars | A (₹) | B (₹) | Particulars | A (₹) | B (₹) |
|---|---|---|---|---|---|
| To Drawings A/c | 6,000 | 6,000 | By Balance b/d | 50,000 | 30,000 |
| To Balance c/d | 51,400 | 31,600 | By Interest on Capital A/c | 5,000 | 3,000 |
| By B's Salary A/c | — | 3,000 | |||
| By Profit & Loss Appr. A/c | 2,400 | 1,600 | |||
| 57,400 | 37,600 | 57,400 | 37,600 | ||
Working Notes: Net profit = 16,500 − 1,500 = ₹15,000; Gross profit = 1,000 + 500 + 1,500 + 15,000 = ₹18,000.
Interest on capitals (from Capital Accounts) A ₹5,000, B ₹3,000 = ₹8,000; Drawings: A = 57,400 − 51,400 = ₹6,000; B = 37,600 − 31,600 = ₹6,000.
Teacher's Note:
1. Manager's commission of 10% after charging it is calculated on 16,500, i.e., profit after depreciation and bad debts but before the commission.
Question 19. Lalan and Balan were partners in a firm sharing profits in the ratio of 3:2. Their fixed capitals on 1.4.2016 were: Lalan ₹1,00,000 and Balan ₹2,00,000. They agreed to allow interest on capital @12% per annum and to charge on drawings @15% per annum. The firm earned a profit, before all the above adjustments, of ₹30,000 for the year ended 31.3.2017. The drawings of Lalan and Balan during the year were ₹3,000 and ₹5,000 respectively. Showing your calculations, clearly prepare Profit and Loss Appropriation A/c of Lalan and Balan.
The interest on capital will be allowed even if the firm incurs a loss. [CBSE (AI) 2012]
Answer:
Ans. Net Loss transferred to: Lalan's Current A/c ₹3,240; Balan's Current A/c ₹2,160.
Working: Interest on capital = 12,000 + 24,000 = ₹36,000; Interest on drawings (6 months) = 225 + 375 = ₹600; Loss = 36,000 − 30,000 − 600 = ₹5,400, shared 3 : 2.
Teacher's Note:
1. Interest on drawings is credited to the Appropriation Account and so reduces the loss.
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Capitals: A | 60,000 | Sundry Assets | 80,000 |
| B | 20,000 | ||
| 80,000 | 80,000 |
Pass the necessary adjustment journal entry and show your working clearly. [CBSE Delhi 2011, 2017]
Answer:
Ans.
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| B's Capital A/c ...Dr. To A's Capital A/c (Being adjustment entry passed) | 5,280 | 5,280 |
Working: Opening capitals = Closing capital + Drawings − Profit credited: A = 60,000 + 10,000 − 18,000 = ₹52,000; B = 20,000 + 20,000 − 12,000 = ₹28,000.
Interest on capital: A ₹6,240, B ₹3,360; Salary to A ₹12,000; Balance profit = 30,000 − 9,600 − 12,000 = ₹8,400 (A ₹5,040, B ₹3,360).
A: 6,240 + 12,000 + 5,040 − 18,000 = 5,280 Cr.; B: 3,360 + 3,360 − 12,000 = 5,280 Dr.
Teacher's Note:
1. Interest on capital is on opening capital, which must be worked back from the closing Balance Sheet.
Showing your calculations clearly, pass a necessary adjustment entry to give effect to the new agreement between Prem, Param and Priya. [CBSE (AI) 2015]
Answer:
Ans.
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Param's Current A/c ...Dr. Priya's Current A/c ...Dr. To Prem's Current A/c (Being adjustment entry for change in profit sharing ratio for the last four years) | 1,55,000 1,55,000 | 3,10,000 |
Working: Total profit = ₹15,50,000. Credited in 2 : 3 : 5 = 3,10,000; 4,65,000; 7,75,000. Should be in 2 : 1 : 2 = 6,20,000; 3,10,000; 6,20,000. Net effect: Prem 3,10,000 Cr., Param 1,55,000 Dr., Priya 1,55,000 Dr.
Teacher's Note:
1. Work on the total of all four years' profits at once; the firm's net effect must be nil.
Question 22. E, F and G were partners in a firm sharing profits in the ratio of 3 : 3 : 4. Their respective fixed capitals were E ₹3,00,000; F ₹4,00,000 and G ₹5,00,000. The partnership deed provided for allowing interest on capital @ 12% p.a. even if it results into a loss to the firm. The net profit of the firm for the year ended 31st March, 2018 was ₹2,10,000. Pass necessary journal entries for allowing interest on capital and division of profit/loss in books of the firm. [CBSE 2019]
Answer:
Ans. Divisible Profit = ₹66,000
Working: Interest on capital = 36,000 + 48,000 + 60,000 = ₹1,44,000 (credited to E's, F's and G's Current A/cs); Divisible profit = 2,10,000 − 1,44,000 = ₹66,000, shared 3 : 3 : 4 = E ₹19,800, F ₹19,800, G ₹26,400.
Teacher's Note:
1. With fixed capitals, interest on capital and share of profit are credited to Current Accounts, not Capital Accounts.
| Date | ₹ |
|---|---|
| 1st April | 10,000 |
| 1st June | 9,000 |
| 1st Nov. | 14,000 |
| 1st Dec. | 5,000 |
Calculate interest on the Drawings @ 6% p.a. [CBSE Sample Question Paper 2015]
Answer:
Ans. Interest on Kanika's drawings ₹1,500, Interest on Gautam's drawings ₹2,250
Working: Kanika: Products = 10,000 × 12 + 9,000 × 10 + 14,000 × 5 + 5,000 × 4 = ₹3,00,000; Interest = 3,00,000 × 6/100 × 1/12 = ₹1,500.
Gautam: 60,000 × 6/100 × 7.5/12 = ₹2,250. Rent paid for the firm's office is a business expense, not drawings.
Teacher's Note:
1. Ignore the rent for the firm's office: only personal withdrawals are drawings.
Question 24. L, M and N were partners in a firm sharing profits in the ratio of 3 : 4 : 5. Their fixed capitals were ₹4,00,000, ₹5,00,000 and ₹6,00,000 respectively. The partnership deed provided for the following.
(i) Interest on capital @6% per annum.
(ii) Salary of ₹30,000 per annum to N.
(iii) Interest on partners' drawings will be charged @ 12% per annum.
During the year ended 31st March, 2016, the firm earned a profit of ₹2,70,000. L withdrew ₹10,000 on 1st April, 2015, M withdrew ₹12,000 on 30th September, 2015 and N withdrew ₹15,000 on 31st December, 2015.
Prepare Profit and Loss Appropriation account for the year ended 31st March, 2016. [CBSE (AI) 2010]
Answer:
Ans. Profit transferred to: L's Current A/c ₹38,092.50, M's Current A/c ₹50,790 and N's Current A/c ₹63,487.50
Working: Interest on capital = 24,000 + 30,000 + 36,000 = ₹90,000; Interest on drawings = 1,200 (12 months) + 720 (6 months) + 450 (3 months) = ₹2,370; Divisible profit = 2,70,000 + 2,370 − 90,000 − 30,000 = ₹1,52,370, shared 3 : 4 : 5.
Teacher's Note:
1. Count months from the date of each withdrawal to 31st March to get the period of interest.
Question 25. Suresh and Ramesh were partners in a firm sharing profits in the ratio of 5 : 3. Their fixed capitals on 1.4.2010 were: Suresh ₹80,000 and Ramesh ₹1,00,000. They agreed to allow interest on capital @12% per annum and to charge on drawings @15% per annum. The firm earned a profit, before all above adjustments, of ₹14,040 for the year ended 31.3.2011. The drawings of Suresh and Ramesh during the year were ₹6,000 and ₹10,000 respectively. Showing your calculations clearly, prepare Profit and Loss Appropriation Account of Suresh and Ramesh. The interest on capital will be allowed even if firm incurs a loss. [CBSE (F) 2012]
Answer:
Ans. Loss transferred to Suresh's Current A/c ₹3,975 and Ramesh's Current A/c ₹2,385
Working: Interest on capital = 9,600 + 12,000 = ₹21,600; Interest on drawings (6 months) = 450 + 750 = ₹1,200; Loss = 21,600 − 14,040 − 1,200 = ₹6,360, shared 5 : 3.
Teacher's Note:
1. Since interest on capital is allowed even in a loss, the shortfall becomes a loss shared in the profit sharing ratio.
(i) Interest on Capital @ 12% p.a.
(ii) Ravi's salary ₹6,000 per month and Mohan's salary ₹60,000 per year.
The profit for the year ended 31.3.2007 was ₹5,04,000 which was distributed equally, without providing for the above. Pass an adjustment entry. [CBSE (Delhi) 2008]
Answer:
Ans.
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Mohan's Current A/c ...Dr. To Ravi's Current A/c (Being adjustment entry passed) | 38,000 | 38,000 |
Working: Ravi should get 1,20,000 + 72,000 + 98,000 = ₹2,90,000; Mohan 84,000 + 60,000 + 70,000 = ₹2,14,000 (balance profit ₹1,68,000 in 7 : 5). Each was credited ₹2,52,000.
Teacher's Note:
1. Compare what each partner should have received with what was actually credited; the difference is the adjustment.
Question 27. Vikas and Vivek were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2014 they admitted Vandana as a new partner for 1/8th share in the profits with a guaranteed profit of ₹1,50,000. The new profit sharing ratio between Vikas and Vivek will remain the same but they decided to bear any deficiency on account of guarantee to Vandana in the ratio 2 : 3. The profit of the firm for the year ended 31st March, 2015 was ₹9,00,000.
Prepare Profit and Loss Appropriation Account of Vikas, Vivek and Vandana for the year ended 31st March, 2015. [CBSE (AI) 2016]
Answer:
Ans. Net Profit transferred to: Vikas ₹4,57,500; Vivek ₹2,92,500 and Vandana ₹1,50,000
Working: New ratio 21 : 14 : 5; shares 4,72,500; 3,15,000; 1,12,500. Deficiency ₹37,500 borne by Vikas ₹15,000 and Vivek ₹22,500 (2 : 3).
Teacher's Note:
1. The deficiency ratio (2 : 3) is different from the profit ratio (3 : 2); do not mix them up.
Long Answer Questions (5 Marks)
Answer:
Ans. Divisible Profits ₹52,300, C's Commission ₹3,700,
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| A's Current A/c ...Dr. To B's Current A/c To C's Current A/c (Being adjustment entry passed) | 16,080 | 14,253 1,827 |
Working: Interest on capital 3,000 + 2,000 + 1,000 = ₹6,000; C's commission = 5% of 74,000 = ₹3,700; Divisible profit = 80,000 − 6,000 − 18,000 − 3,700 = ₹52,300 (20,920; 20,920; 10,460).
Credited in 3 : 2 : 1 = 40,000; 26,667; 13,333. Should be A 23,920; B 40,920; C 15,160.
Teacher's Note:
1. Commission is on profit after interest on capital but before B's salary, so deduct only ₹6,000 before taking 5%.
Question 29. Singh and Gupta decided to start a partnership firm to manufacture low cost jute bags as plastic bags were creating many environmental problems. They contributed capitals of ₹1,00,000 and ₹50,000 on 1st April, 2012 for this. Singh expressed his willingness to admit Shakti as a partner without capital, who is specially abled but a very creative and intelligent friend of his. Gupta agreed to this. The terms of partnership were as follows:
(i) Singh, Gupta and Shakti will share profits in the ratio of 2 : 2 : 1.
(ii) Interest on capital will be provided @6% p.a.
Due to shortage of capital, Singh contributed ₹25,000 on 30th September, 2012 and Gupta contributed ₹10,000 on 1st January, 2013 as additional capital. The profit of the firm for the year ended 31st March, 2013 was ₹1,68,900.
Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2013. [CBSE (AI) 2014]
Answer:
Ans. Profit transferred to: Singh's Capital A/c ₹63,600, Gupta's Capital A/c ₹63,600, Shakti's Capital A/c ₹31,800
Working: Interest on capital: Singh 6,000 + 750 (25,000 for 6 months) = ₹6,750; Gupta 3,000 + 150 (10,000 for 3 months) = ₹3,150; Divisible profit = 1,68,900 − 9,900 = ₹1,59,000, shared 2 : 2 : 1.
Teacher's Note:
1. Additional capital earns interest only from the date it is introduced.
(i) The profit of the year ended 31st March, 2014 was ₹90,000.
(ii) During the year, Esha and Manav each withdrew a sum of ₹48,000 in equal instalments in the middle of every month and Daman withdrew ₹60,000.
(iii) The interest on drawings was to be charged @5% p.a. and interest on capital was to be allowed @ 10% p.a.
(iv) The profit-sharing ratio among the partners was 3 : 2 : 1.
Showing your workings clearly, pass the necessary rectifying entry. [CBSE (AI) 2015]
Answer:
Ans.
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Esha's Capital A/c ...Dr. Manav's Capital A/c ...Dr. To Daman's Capital A/c (Being rectifying entry passed) | 6,250 300 | 6,550 |
Working: Opening capitals = 3,23,000; 2,58,000; 2,05,000; Interest on capital = 32,300; 25,800; 20,500; Interest on drawings = 1,200; 1,200; 1,500 (Daman's for 6 months as date is not given).
Divisible profit = 90,000 − 78,600 + 3,900 = ₹15,300 (7,650; 5,100; 2,550). Net effect: Esha 6,250 Dr., Manav 300 Dr., Daman 6,550 Cr.
Teacher's Note:
1. When the date of a single withdrawal is not given, charge interest for an average of 6 months.
(i) A and B were entitled to a salary of ₹1,500 each per quarter.
(ii) C was entitled to a commission of ₹6,000.
(iii) A and C had guaranteed a minimum profit of ₹48,000 p.a. to B.
(iv) Profits were to be shared in the ratio of 4:3:2.
Pass necessary adjustment entry for the above adjustments in books of the firm. [CBSE (AI) 2004]
Answer:
Ans.
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| A's Capital A/c ...Dr. To B's Capital A/c (Being adjustment entry passed) | 6,000 | 6,000 |
Working: Salaries 6,000 + 6,000, commission 6,000; balance profit ₹1,02,000 in 4 : 3 : 2 = 45,333; 34,000; 22,667. B's share of profit (34,000) is raised to the guaranteed ₹48,000; the deficiency of ₹14,000 is borne by A and C in 4 : 2 (9,333 and 4,667).
Should get: A 6,000 + 36,000 = 42,000; B 6,000 + 48,000 = 54,000; C 6,000 + 18,000 = 24,000. Credited 48,000; 48,000; 24,000.
Teacher's Note:
1. The guarantee here is of the share of profit, excluding salary; A and C bear the deficiency in their mutual ratio 4 : 2.
Question 32. Ankur, Bhavna and Disha are partners in a firm. On 1st April 2016 the balance in their capital accounts stood at ₹14,00,000, ₹6,00,000 and ₹4,00,000 respectively. They shared profits in the proportion of 7 : 3 : 2 respectively. Partners are entitled to interest on capital @ 6% per annum and salary to Bhavna @ ₹50,000 p.a. and a commission of ₹3,000 per month to Disha as per the provisions of the partnership deed.
Bhavna's share of profit (excluding interest on capital) is guaranteed at not less than ₹1,70,000 p.a. Disha's share of profit (including interest on capital but excluding salary) is guaranteed at not less than ₹1,50,000 p.a. Any deficiency arising on that account shall be met by Ankur. The profits of the firm for the year ended 31st March 2017 amounted to ₹9,50,000. Prepare 'Profit and Loss Appropriation Account' for the year ended 31st March, 2017. [CBSE (AI) 2013]
Answer:
Ans. Profit transferred to Ankur's Capital ₹4,14,000, Bhavna's Capital ₹1,80,000 and Disha's Capital ₹1,26,000
Working: Interest on capital 84,000 + 36,000 + 24,000 = ₹1,44,000; Salary ₹50,000; Commission ₹36,000; Balance ₹7,20,000 in 7 : 3 : 2 = 4,20,000; 1,80,000; 1,20,000.
Bhavna 1,80,000 > 1,70,000 (no deficiency); Disha 1,20,000 + 24,000 = 1,44,000, deficiency ₹6,000 met by Ankur.
Teacher's Note:
1. Check each guarantee on its own basis: one excludes interest on capital, the other includes it.
| Capital Accounts (₹) | Current Accounts (₹) | |
|---|---|---|
| A | 4,00,000 Cr. | 20,000 Dr. |
| B | 5,00,000 Cr. | 10,000 Dr. |
| C | 6,00,000 Cr. | 15,000 Dr. |
(i) Interest on Capital @ 9% p.a.
(ii) Salary to A @ ₹50,000 per quarter
On 1st January, 2016 C had given a loan of ₹2,00,000 to the firm at 6% per annum interest. During the year their drawings were A ₹40,000, B ₹75,000 and C ₹55,000. On 1st January, 2018, A introduced further capital ₹2,00,000. The net profit of the firm before allowing interest on C's loan was ₹4,00,000.
Prepare Profit and Loss Appropriation Account of the firm for the year ending 31st March, 2018 and the Current Accounts of the partners. [CBSE 2019]
Answer:
Ans. Divisible Profits ₹48,500, A's Current A/c ₹1,95,050 (Cr.), C's Current Account ₹3,400 (Cr.), B's Current Account ₹25,450 (Dr.).
Working: Interest on C's loan = ₹12,000 (charge), so profit available = ₹3,88,000. Interest on capital: A 36,000 + 4,500 (on 2,00,000 for 3 months) = 40,500; B 45,000; C 54,000. Salary to A ₹2,00,000. Divisible profit = 3,88,000 − 1,39,500 − 2,00,000 = ₹48,500 (14,550; 14,550; 19,400).
Teacher's Note:
1. Interest on a partner's loan is a charge, deducted before appropriations and credited to the Loan Account, not the Current Account.
Free study material for Accountancy
CBSE Class 12 Accountancy Study Material: Part 1 Chapter 01 Accounting for Partnership : Basic Concepts
Quick Revision Material for Part 1 Chapter 01 Accounting for Partnership : Basic Concepts
Review targeted study resources for Part 1 Chapter 01 Accounting for Partnership : Basic Concepts tailored for Class 12 learners. Utilizing these structured notes and quick-revision tools ensures complete alignment with current CBSE evaluation standards.
Expert Notes and Solved Exam Questions
Designed around the official curriculum, these study guides guarantee standard compliance. Reviewing step-by-step solutions clarifies complex sub-topics within Part 1 Chapter 01 Accounting for Partnership : Basic Concepts and demystifies standard marking schemes for Accountancy evaluations.
Additional Study Resources for Class 12
For peak performance in upcoming evaluations, integrate official Accountancy sample papers directly into your study schedule. Follow up your revision by attempting online MCQ tests for Part 1 Chapter 01 Accounting for Partnership : Basic Concepts to refine calculation speed and precision.
FAQs
The latest 2026-27 advanced study resources for Class 12 Accountancy are available for free on StudiesToday.com which includes NCERT Exemplars, high-order thinking skills (HOTS) questions, and deep-dive concept summaries.
Our exhaustive Class 12 Accountancy package includes chapter wise revision notes, solved practice sheets, important formulas and Concept Maps to help in better understanding of all topics.
Yes. For Class 12, our resources have been developed to help you get better marks in CBSE school exams and also build fundamental strength needed for entrance tests including Competency Based learning.
in Class 12, students should use Active Recall method, read the concept summary, then solve the Important Questions section without looking at the answers and then check your answers.
All CBSE Accountancy study materials are provided in mobile-friendly PDF. You can download and save them on your device.
Yes, our team has ensured that all Accountancy materials for Class 12 are strictly aligned with the National Education Policy (NEP) 2020 and the latest 2026-27 CBSE syllabus.