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Published on: 30/08/2019
Accounting for Partnership Firms - Fundamentals
Download CBSE Class 12th Standard CBSE Accountancy question papers, sample papers, important questions, and previous year solved papers in PDF format. Get free study materials, NCERT solutions, and exam preparation resources for Class 12th Standard CBSE Accountancy
Questions + Answers key
Take MCQ Accountancy Test
1.
Arun and Arora were partners in a firm sharing profits in the ratio of 5 : 3. Their fixed capitals as on 1.4.2010 were : Arun Rs. 60,000 and Arora Rs. 80,000. They agreed to allow interest on capital @ 12% p.a. and to charge on drawings @ 15% p.a. The profit of the firm for the year ended 31.3.2011 before all above adjustment were Rs. 12,600. The drawings made by Arun were Rs. 2,000 and by Arora Rs. 4,000 during the year. Prepare Profit and Loss Appropriation Account of Arun and Arora. Show your calculations clearly. The interest on capital will b allowed even if the firm incurs loss.
2.
A, B and C were partners in a firm having capitals of Rs. 60,000; Rs. 60,000 and Rs. 80,000 respectively. Their Current Account balances were A : Rs, 10,000; B : Rs 5,000 and C : Rs, 2,000 (Dr.). According to the partnership deed the partners were entitled to interest on capital @ 50% p.a. C being the working partner was also entitled to a salary of Rs. 6,000 p.a.
The profits were to be divided as follows:
(a) The first Rs. 20,000 in proportion to their capitals.
(b) Next Rs. 30,000 in the ratio of 5 : 3 : 2.
(c) Remaining profits to be shared equally.
The firm made a profit of Rs. 1,56,000 before charging any of the above items. Prepare the Profit & Loss Appropriation Account and pass necessary journal entry for appropriation of profit.
3.
D, E and F were partners in a firm sharing profits in the ratio of 5 : 7 : 8. Their fixed capitals were D Rs. 5,00,000, E Rs. 7,00,000. and F Rs. 8,00,000. Their partnership deed provided for the following :
(i) Interest on capital @ 10% p.a
(ii) Salary of Rs, 10,000 per month of F.
(iii) Interest on drawings @ 12% p.a.
D withdrew Rs. 40,000 on 31st January, 2009; E withdrew Rs. 50,000 on 31st March, 2009 and F withdrew Rs. 30,000 on 31st December, 2009.
During the year ended on 31st December, 2009 the firm earned a profit of Rs. 3,50,000.
Prepare the Profit and Loss Appropriation Account for the year ended 31st December, 2009.
4.
What is meant by ' average profit ' ?
5.
What are super profits ?
6.
State the nature of business afftect the value of goodwill of a firm ?
7.
How does the market situation affect the value of goodwill of a firm ?
8.
How does the factor " quality of product " affect the goodwill of the firm ?
9.
How does the factor " efficiency of management" affect the goodwill of the firm ?
10.
harish is a partner in a firm.He withdrew the following amounts during the year 2017
| Date | Amt(Rs) |
|---|---|
| 1st february | 4,000 |
| 1st May | 10,000 |
| 30th June | 4,000 |
| 31st October | 12,000 |
| 31st December | 4,000 |
Interest on drawings to be charged @7\(1\over 2\)% per annum.Calculate the amount of interest to be charged on Harish's drawing for the Year ending 31st December, 2017
(i) Simple method and
(ii) Product method.
11.
Calculate interest on drawings of Mr.Ghai @ 10% per annum for the year ended 31st March 2018, in each of the following alternative cases
Case I If he Withdrew Rs.15,000 in the beginning of each quarter.
Case II If he Withdrew Rs.15,000 at the end of each quarter.
Case III If he Withdrew Rs.15,000 during the middle of each quarter.
12.
Raj and Sameer are partners sharing profits equally.Raj withdrew regularly Rs 8000 at the end of every month for six months ended 30th September 2017. Calculate interest on drawings @ 5% per annum.
1.
Divsible loss Rs. 3,750 being Arun's share Rs. 2,344 and Arora's share Rs. 1,406.
(i) As interest on capital is charged against profit, so loss will be the shared by partners.
(ii) In the absence of information, interest on drawings will be calculated for 6 months.
2.
| Particulars | Amt (Rs.) | Amt (Rs.) | Particulars | Amt (Rs.) |
|---|---|---|---|---|
| To Interest on Capital | By Net Profit as per Profit and Loss Nc | 1,56,000 | ||
| A's Current A/c | 3,000 | |||
| B's Current A/c | 3,000 | |||
| C's Current A/c | 4,000 | 10,000 | ||
| To Salary | ||||
| C's Current A/c | 6,000 | |||
| To Profit Transferred to | ||||
| A's Current A/c | 51,000 | |||
| B's Current A/c | 45,000 | |||
| C's Current A/c | 44,000 | 1,40,000 | ||
| 1,56,000 | 1,56,000 |
Journal
| Date | Particulars | LF | Amt (Dr) | Amt (Cr) |
|---|---|---|---|---|
| Profit and Loss Appropriation A/c Dr | 1,40,000 | |||
| To A's Current A/c | 51,000 | |||
| To B's Current A/c | 45,000 | |||
| To C's Current A/c | 44,000 | |||
| (Being profit distributed among the partners) |
Working Note
1. Calculation of Interest on Capital
\(A=60,000 \times \frac{5}{100}=Rs. 3,000 ; B=60,000 \times \frac{5}{100}=Rs. 3,000 ; C=80,000 \times \frac{5}{100}=Rs. 4,000\)
2. Capital ratio of A, Band C =60,000 : 60,000 : 80,000, i.e. 3 : 3 : 4.
3.
| Divisible Profit Rs. 1,40,000 viz., |
A Rs. |
B Rs. |
C Rs. |
|---|---|---|---|
| First Rs. 20,000 in 3 : 3 : 4 | 6,000 | 6,000 | 8,000 |
| Next Rs. 30,000 in 5 : 3 : 2 | 15,000 | 9,000 | 6,000 |
| Remaining profit Rs. 90,000 equally i.e. 1 : 1 : 1 | 30,000 | 30,000 | 30,000 |
| 51,000 | 45,000 | 44,000 |
3.
Interest on Drawing D Rs. 4,400, E Rs 4,500 and F Nil; Divisible Profit Rs. 38,900 transferred to D's current A/c Rs 9,725, E's Current A/c Rs 13,615 and F's Current A/c Rs 15,560.
4.
( )
Average profit is the average of the profits of past few years.
5.
( )
The term super profit means the profit over and above the normal or average profit earned by similar firms.
6.
( )
A business which products best quality of products or have a stable demand is likely to earn more profits and therefore, has more value of goodwill.
7.
( )
The monopoly conditions or limited compettion enables the businbess to earn profits, which increases the value of goodwill.
8.
( )
A business which produces best quality of products is likely to earn more profits and therefore, has more value of goodwill.
9.
( )
The efficiency of management enjoys the advantages of high productivity and cost efficiency. This leads to higher profits and therefore, has more goodwill
10.
Calculation of Intrest on Harish's drawings
(i) Simple Method
| Date | Amt(Rs) | number of Months upto 31st december | intrest @7.5%(Rs) |
|---|---|---|---|
| 1st February | 4,000 | 11 months | \(275\left[ 4,000\times 7.5/100\frac { 11 }{ 12 } \right] \) |
| 1st May | 10,000 | 8 months | \(500\left[ 10,000\times 7.5/\frac { 8 }{ 12 } \right] \) |
| 30th June | 4,000 | 6 months | \(150\left[ 4,000\times 7.5/100\times \frac { 6 }{ 12 } \right] \) |
| 31st October | 12,000 | 2 months | \(150\left[ 12,000\times 7.5/100\times \frac { 2 }{ 12 } \right] \) |
| 31st December | 4,000 | 0 months | 0 |
| Total | 34,000 | 1,075 |
(ii) Product Method
| Date | Amt (Rs.) | Period | Product (Rs.) |
| 1st February, 2017 | 4,000 | 11 months | 44,000 |
| 1st May, 2017 | 10,000 | 8 months | 80,000 |
| 30th June, 2017 | 4,000 | 6 months | 24,000 |
| 31 st October, 2017 | 12,000 | 2 months | 24,000 |
| 31 st December, 2017 | 4,000 | 0 month | - |
| Total | 1,72,000 |
\(\text { Interest }=1,72,000 \times \frac{7.5}{100} \times \frac{1}{12}=RS. 1,075\)
11.
Case I = Rs.3,750,Case II = Rs 2,250, Case III = Rs.3,000
12.
Interest on drawings = Rs 500
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