DR.M.K.K.

ARYA MODEL SCHOOL

ASSIGNMENT 2022-23 CH-FUNDAMENTALS
Q1.Shankar and Manu are partners in a firm. On 1st April, 2014, their fixed
capital accounts showed a balance of 2,00,000 and 4,00,000 respectively. On
this date, their current account balances were 50,000 and 1,00,000
respectively.
On 1st January, 2015, Shankar introduced additional capital of 2,00,000 while
Manu gave a loan of 1,50,000 to the firm.
The clauses of their partnership deed provided for:
(a) Interest on capital to be allowed at the rate of 10% per annum.
(b) Interest on drawings to be charged at the rate of 12% per annum.
(c) Profits to be shared by them in the ratio of 3: 2.
(d) 10% of the correct net profit to be transferred to General Reserve.
During the financial year 2014-15, both partners withdrew 6,000 each at the
beginning of every quarter.
The net profit of the firm, before any interest, for the financial year 2014-15
was 5,00,000.
You are required to prepare for the year 2014-15: (1) Profit and Loss
Appropriation Accounts,(i) Partners' Fixed Capital Accounts.(iii) Partners'
Current Accounts.(iv) Partner's Loan Account.
Q2. A, B and C were partners in a firm having capitals of ₹1,00,000; 1,00,000
and 2,00,000 respectively. According to the partnership deed the partners
were entitled to interest on capital @ 6% p.a. A being the working partner was
also entitled to a salary of Rs.5,000 per month. The profits were to be divided
as follows:
(a) The first 40,000 in the ratio of 2:3:5.
(b) Next 80,000 in the proportion of their capitals.
(c) Remaining profits to be shared equally.
The firm made a profit of 2,70,000 for the year ended 31st March, 2022 before
charging any of the above items. Prepare the Profit & Loss Appropriation
Account and pass necessary journal entry for apportionment of profits.
Q3. On 1st April, 2021 the balances of A and B were as follows:
Capital A/c Current A/c
A 1,00,000 (Cr.)8,420
B 40,000 (Dr.)3,200
On 1st July, 2021, A withdrew Rs.20,000 from his capital and B introduced Rs.
10,000 as further capital on the same date. According to the deed, interest on
capitals is to be allowed at 8% p.a. but no interest is to be allowed or charged
on current account balances and drawings. A is entitled to 3/5 and B 2/5 of the
profit. The manager of the firm is entitled to a commission of 10% of the profit
before any adjustment is made according to the deed. For the year ended 31st
March, 2022, the profit was Rs.40,000 and the drawings of A and B were
12,000 and 10,000 respectively. Prepare the P & L Appropriation A/c, Capital
Accounts and Current Accounts.
Q4. Arun and Arora were partners in a firm sharing profits in the ratio of 5:3.
Their fixed capitals on 1.4.2020 were: Arun Rs. 60,000 and Arora Rs. 80,000.
They agreed to allow interest on capital @ 12% per annum and to charge on
drawings @15% per annum. The profit of the firm for the year ended
31.3.2021 before all above adjustments were 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 be allowed even if the firm incurs a loss.
Q5. E, F and G were partners in a firm sharing profits in the ratio of 3: 2: 1.
After division of the profits for the year ended 31-3-2021 their capitals were: E
Rs. 2,95,000; F Rs. 3,30,000; and G Rs. 3,35,000. During the year they
withdrew 40,000 each. The profit of the year was 1,80,000. The partnership
deed provided that interest on capital will be allowed @ 12% p.a. While
preparing the final accounts, interest on partner's capital was not allowed.
You are required to calculate the capital of E, F and G as on 1-4-2020 and pass
the necessary adjustment entry for providing interest on capital. Show your
workings clearly.
Q6. Alex, John and Sam are partners in a firm. Their capital accounts on 1st
April, 2021, stood at Rs.1,00,000, Rs. 80,000 and Rs. 60,000 respectively.
Each partner withdrew Rs. 5,000 during the financial year 2021-22.
As per the provisions of their partnership deed:
(a) John was entitled to a salary of 1,000 per month.
(b) Interest on capital was to be allowed @10% per annum.
(c) Interest on drawings was to be charged @4% per annum.
(d) Profits and losses were to be shared in the ratio of their capitals.
The net profit of Rs. 75,000 for the year ended 31st March 2022, was divided
equally amongst the partners without providing for the terms of the deed.
You are required to pass a single Adjustment Entry to rectify the error .
Q7. A, B and C were partners in a firm. On 1st April, 2021 their capitals stood as
Rs. 5,00,000; 2,50,000 and 2,50,000 respectively. As per provisions of the
partnership deed:
(i) C was entitled for a salary of Rs. 5,000 per month.
(ii) A was entitled for a commission of Rs.80,000 p.a.
(iii) Partners were entitled to interest on capital @6% p.a.
(iv) Partners will share profits in the ratio of capitals.
Net profit for the year ended 31.03.2022 was 3,00,000 which was distributed
equally, without taking into consideration the above provisions. Showing your
workings clearly, pass necessary adjustment entry for the above.
Q8. A, B and C are partners in a firm sharing profits in the ratio of 2:2: 1.
According to the terms of the partnership agreement C has to get a minimum
of 6,000 irrespective of the profits of the firm. Any excess payable to C on
account of such guarantee shall be borne by A. Profits earned during the year
ended 31st March, 2022 were Rs. 25,000. Pass journal entries in the books of
the firm.
Q9. Charu and Divya are partners in a firm. Charu was to get a commission of
10% on the net profits before charging any commission. However, Divya was to
get a commission of 10% on the net profits after charging all commissions. Fill
in the missing figures in the following Profit and Loss Appropriation Account
for the year ended 31st March 2022:
PROFIT AND LOSS APPROPRIATION ACCOUNT for the year ended 31st March,
2022
Particulars Rs. Particulars Rs.
To Charu’s Commission By P & L A/c -------
( Rs. * 10/100) 44,000

To Divya’s Commission -------

To Profits tr. To
Charu’s Capitals ---- --------
Divya’s Capital --------
---- ----
Q10. X and Y are partners in a firm sharing profits in the ratio of 3:2. On 1-4-
2021 they decide to admit Z for 1/5 th share in profits with a minimum
guaranteed amount. Any deficiency arising on that account shall be met by X.
Fill up the missing figures in the following Profit and Loss Appropriation
Account:
PROFIT AND LOSS APPROPRIATION ACCOUNT for the year ended on 31st
March, 2022
Particulars Rs. Particulars Rs.
To X’s Capital A/c By Profit & loss A/c 4,50,000
(4,50,000*---) ------
Less Transferred to Z -----
_______
To Y’s Capital A/c
(4,50,000*___) ------

To Z’s Capital A/c

1,20,000
(4,50,000*___) -----
Add from X ------------
_____
4,50,000 4,50,000