ACCOUNTING FOR PARTNERSHIP FIRMS - FUNDAMENTALS
1 R and M, two partners, drew for their personal use Rs 1,20,000 and Rs 80,000. Interest is chargeable @6% p.a. on the drawings. What is the amount of interest chargeable from each partner?
(R Rs 3,600 and M Rs 2,400)
2 A and B are partners sharing profits equally. A drew regularly Rs 4,000 at the end of every month for six months ended 30th September, 2018. Calculate interest on drawings @5% p.a. for a period of six months. (IOD Rs 250)
3 K and G are partners doing a dry cleaning business in Lucknow, sharing profits in the ratio 2:1 with capitals Rs 5,00,000 and Rs 4,00,000 respectively. K withdrew the following
amounts during the year to pay the hostel expenses of her :
1st April Rs 10,000
1st June Rs 9,000
1st November Rs 14,000
1st December Rs 5,000
G withdrew Rs 15,000 on the first day of April, July, October and January to pay rent for the accommodation of his family. He also paid `20,000 per month as rent for his office of partnership which was in a nearby shopping complex. Calculate interest on drawings @6% p.a. (IOD: K Rs 1,500; G Rs 2,250)
4 Ravi and Mohsin are partners in a business. Their capitals at the end of the year were Rs 24,000 and Rs 18,000 respectively. During the year Ravi’s drawings and Mohsin’s drawings were Rs 4,000 and Rs 6,000 respectively. Profit (before charging interest on capital) during the year was Rs 16,000. Calculate interest on capital @5% p.a. for the year ended 31st March, 2018. (IOC : Ravi Rs 1,000; Mohsin Rs 800)
5 On 1st April, 2017 Priya, Neha and Payal entered into partnership with capitals of Rs 60,000; Rs 50,000 and Rs 30,000 respectively. Payal advanced Rs 10,000 as loan to the partnership on 1st October, 2017. The Partnership Deed contained the following clauses:
(i) Interest on capital @6% p.a.
(ii) Interest on drawings @6% p.a. Each drew Rs 4,000 at the end of each quarter commencing from 30th June, 2017.
(iii) Working partners Priya and Neha to get salary of Rs 200 and Rs 300 per month respectively.
(iv) Interest on loan was given to Payal @6% p.a.
(v) Neha to get rent of Rs 2,000 per month for use of her building by the firm. It is paid to her by cheque at the end of every month.
(vi) Profits and losses are to be shared in the ratio of 4:2:1 up to Rs 70,000 and above Rs 70,000 equally.
Net Profit of the firm for the year ended 31st March, 2018 (before the above adjustments) was Rs 1,35,000. Prepare Profit & Loss Appropriation Account and Capital Accounts of partners assuming capitals to be fixed.
(Ans: Share of Profit : Priya Rs 49,127; Neha Rs 29,127 and Payal Rs 19,126)
6 On 31st March, 2014, balances in the Capital Accounts of E, M and A after making adjustments for profits and drawings were Rs 80,000, Rs 60,000 and Rs 40,000 respectively. Subsequently, it was discovered that the interest on capital and drawings had been omitted.
(i) The profit for the year ended 31st March, 2014 was Rs 20,000.
(ii)During the year E and M each withdrew a total sum of Rs 12,000 in equal instalments in the beginning of each month and A withdrew a total sum of Rs 24,000 in equal instalments at the end of each month.
(iii)The interest on drawings was to be charged @5% p.a. and interest on capital was to be allowed @10%.
(iv)The profit sharing ratio among the partners was 2:1:1
Showing your working notes clearly, pass the necessary rectifying entry.
7 The capitals of P, Q and R as on 31st March, 2018 amounted to Rs 1,50,000, Rs 5,50,000 and Rs 11,00,000 respectively. The profits amounting to Rs 3,00,000 for the year 2017-18 were distributed in the ratio of 4:1:1 after allowing interest on capital @10% p.a. During the year, each partner withdrew Rs 50,000 per month in the beginning of each month. The Partnership Deed was silent as to profit sharing ratio and interest on drawings but provided for interest on capital @12% p.a. Showing your working clearly, pass the necessary adjustment entry to rectify the above error.
8 X, Y and Z are partners in a firm sharing profits & losses in the ratio of 4:2:1. It is provided that Z’s share in profit would not be less than Rs 37,500. The profit for the year ended 31st March, 2018 amounted to Rs 1,57,500.
Prepare Profit & Loss Appropriation Account.
(Ans: Share of profit of X Rs 80,000; Y Rs 40,000 and Z Rs 37,500)
9 P and Q were partners in a firm sharing profits in the ratio of 5:3. On 1st April, 2014 they admitted R as a new partner for 1/8th share in the profits with a guaranteed profit of Rs 75,000. The new profit sharing ratio between P and Q remain the same but they agreed to bear any deficiency on account of guarantee to R in the ratio of 3:2. The profit of the firm for the year ended 31st March, 2015 was Rs 4,00,000. Prepare Profit & Loss Appropriation Account of P, Q and R for the year ended 31st March, 2015.
10 Suresh, Sahil and Sumit are partners sharing profits in the ratio 5:3:2. During the year ended 31st March, 2018, the firm earned profit of Rs 3,50,000. Prepare Profit and Loss Appropriation Account giving effect to the following:
(i) Each of the partner is to get remuneration of Rs 60,000 p.a.
(ii) Interest on Capital is to be allowed @10% p.a. Capitals of Suresh, Sahil and Sumit as on 1st April, 2017 were Rs 5,00,000; Rs 5,00,000 and Rs 7,50,000 respectively.
(iii) Interest on Drawings charged was Suresh Rs 10,000; Sahil `20,000 and Sumit Rs 25,000.
(iv) Sumit is guaranteed minimum profit of Rs 1,50,000 after above appropriations.
Please click on below link to download CBSE Class 12 Accountancy Fundamentals Partnership Worksheet Set A