MVM

Date : 27-12-2024 STD 12 Commerce Accountancy Total Marks : 64

Most Important Questions , from Fundamentals of partnership

SECTION A

* questions of 3 marks each. [36]

1. A, B and Care partners sharing profits in the ratio of 5 : 4 : 1. C is given a

guarantee that his share of profits in any year will not be less than ₹ 20,000.
The profit for the year ending 31st March 2016 amounts ₹ 1,40,000. Amount
of shortfall in the. profits given to C will be borne by A and· B in the ratio of 3 :
2. Pass necessary journal entry regarding deficiency borne by A and B.
Ans. : Profit of ₹ 1,40,000 divided in the ratio of 5 : 4 : 1
A's Share : 1, 40, 000 ×
5

10
= ₹ 70, 000

B's Share : 1, 40, 000 ×

4

10
= ₹ 56, 000

C’s Share : 1, 40, 000 ×

1

10
= ₹ 14, 000

C’s share in profits amounts to ₹ 14,000 whereas the minimum guaranteed amount is ₹
20,000. Hence, the deficiency of ₹ 6,000 will be borne by A and B in the ratio of 3 : 2. The
adjustment entry will be.

2. calculate interest on A's drawings:

i. If he has withdrew ₹ 60,000 on 1st october 2015 and rate of interest
drawing is 8% per annum.
ii. If he has withdrew ₹ 60,000 on 1st october 2015 and rate of interest
drawing is 8%.

Page 1
 Ans. : Case (i) Interest on Drawings = ₹ 60, 000 × 8

100
×
6

12
= ₹ 2, 400

Case (ii) Since rate of interest is 8% and not 8% p.a. interest will be calculated for 12
months:
Interest on Drawings ₹
8
60, 000 ×
100
= ₹ 4, 800

3. Calculate the interest ondrawings of Mr. Aditya @ 8% p.a. for the year ended
31st March, 20.16, in each of the foilowing alternative cases:
Case:
i. If he withdrew 5,000 in the beginning of each quarter.
ii. If he withdrew 6,000 at the end of each quarter.
iii. If he withdrew 6,000 during the middle of each quarter.
Ans. : Case (i):
i. Total Drawings for the year = ₹ 5, 000 × 4 = ₹ 20, 000

Average Period = (12 months + 3 months) ÷ 2 = 7.5 months

Interest on Drawings = 20, 000 × 100
8
×
7.5

12
= 1, 000

Case (ii):
ii. Total Drawings for the year = ₹ 6, 000 × 4 = ₹ 24, 000

​Average Period = (9 months + 0 month) ÷ 2 = 4.5 months

Interest on Drawings = 24, 000 × 100
8
×
4.5

12
= ₹ 700

Case (iii):
iii. Total Drawings for the year = 10, 000 × 4 = ₹ 40, 000

​Average Period = (10.5 months + 1.5 months) ÷ 2 = 6 months

Interest on Drawings = 24, 000 × 100
8
×
6

12
= ₹ 1, 600

4. Krishna, Sandeep and Karim are partners sharing profits in the ratio of 3 : 2 :
1. Their fixed capitals are: Krishan ₹ 1,20,000, Sandeep 90,000 and Karim ₹
60,000. For the year 2014-15, interest was credited to them @ 6% p.a.
instead of 5% p.a. Record adjustment entry.
Ans. :

Page 2
5. A, B and C are partners in a firm For six months ending 31st March, 2018:
A drew regularly ₹ 15,000 in the beginning of every month B drew regularly ₹
20,000 at the end; of every month and C drew regularly ₹ 25,000 in the
middle of every month. Calculate interest on drawings @ 10% p.a, for. six
months ending 31st March 2018.

Ans. : Total Drawings of A = ₹ 15,000 × 6 = ₹ 90,000

Total Drawings of B = ₹ 20,000 × 6 = ₹ 1,20,000
Total Drawings of C = ₹ 25,000 × 6 = ₹ 1,50,000
Average Period Interest on Drawings
A (6+1)
= 3.5 months
₹ 90, 000 ×
10
×
3.5
= ₹ 2, 625
100 12
2

B (5+0)
= 2.5 months
₹ 1, 20, 000 ×
10

100
×
2.5

12
= ₹ 2, 500
2

C (5.5+0.5)
= 3 months
₹ 1, 50, 000 ×
10
×
3
= ₹ 3, 750
100 12
2

6. X, Y and Z are partners in a firm sharing profits and losses in the ratio 5 : 3 :
2. Their capitals (fixed) are ₹ 2,00,000, ₹ 1,50,000 ₹ 1,25,000 respectively. For
the ended 31st March 2018 interest on capital was credited to them @ 8
instead of 10%.
Give adjusting journal entry.
Ans. :

Page 3
7. The capitals of A, Band C stood at ₹ 20,000, ₹ 15,000 and ₹ 10,000
respectively after the necessary adjustment in respect of drawings and net
profits. Subsequently, it was discovered that interest on capital at 10% p.a.
and interest on drawings ₹ 130, ₹ 90 and ₹ 50 respectively have been
ignored. Profit of the year already adjusted was ₹ 10,000. Drawings of the
partners were ₹ 1,000, ₹ 800 and ₹ 500 respectively. They share profits and
losses in the ratio of 2 : 1 : 1. Give necessary journal entry to rectify the
accounts.
Ans. :

Page 4
8. A, B and Care partners sharing profits in the ratio of 5 : 4 : 1. C is given a
guarantee that his share of profits in any year will not be less than ₹ 20,000.
The profit for the year ending 31st March 2016 amounts ₹ 1,40,000. Amount
of shortfall in the. profits given to C will be borne by A and· B in the ratio of 3 :
2. Pass necessary journal entry regarding deficiency borne by A and B.

Ans. : Profit of ₹ 1,40,000 divided in the ratio of 5 : 4 : 1

A's Share : 1, 40, 000 ×
5

10
= ₹ 70, 000

B's Share
4
: 1, 40, 000 ×
10
= ₹ 56, 000

C’s Share : 1, 40, 000 ×

1

10
= ₹ 14, 000

C’s share in profits amounts to ₹ 14,000 whereas the minimum guaranteed amount is ₹
20,000. Hence, the deficiency of ₹ 6,000 will be borne by A and B in the ratio of 3 : 2. The
adjustment entry will be.

9. Ram and Mohan are equal partners. Their capitals are ₹ 4,000 and ₹ 8,000
respectively. After the accounts for the year are prepared it is discovered that
interest @ 5% p.a. on capital as provided in the Partnership Deed has not
been credited to the Capital Accounts before distribution of profits. It is
decided to make an adjusting entry in the beginning of the next year.
Give necessary adjustment entry.

Page 5
 Ans. :

Working Notes:
WN1: Calculation of Interest on Capital.
Interest on Ram's Capital = 4, 000 × 5
= ₹ 200
100

Interest On Mohan's Capital = 8, 000 ×

5

100
= ₹ 400

Total Interest Amount = 200 + 400 = ₹ 600

10. P and Q were partners in a firm sharing profits and losses equally. Their fixed
capitals were ₹ 2,00,000 and 3,00,000 respectively. The Partnership Deed
provided for interest on capital @ 12% per annum. For the year ended 31st
March, 2016, the profits of the firm were distributed without providing
interest on capital.
Pass necessary adjustment entry to rectify the error.
Ans. :

Working Notes:
11. A, B, C, and D are partners in a firm sharing profits as 4 : 3 : 2 : 1 respectively.
It earned a profit of ₹ 1,80,000 for the year ended 31st March, 2018. As per
the Partnership Deed, they are to charge a commission @ 20% of the profit
after charging such commission which they will share as 2 : 3 : 2 : 3.
You are required to show appropriation of profits among the partners.

Ans. :
Working Notes:
WN1: Calculation of Partners’ Commission
Partners’ Commission = 20% on Net Profit after charging such commission
Partners' Commission = Net Profit × Rate

100+Rate

20
= 1, 80, 000 ×
100+20

20
= 1, 80, 000 ×
120
= ₹ 30, 000

This commission is to be shared by the partners in the ratio of 2 : 3 : 2 : 3

Commission to
2
∴ A = 30, 000 ×
10
= ₹ 6, 000

Commission to
3
B = 30, 000 ×
10
= ₹ 9, 000

Commission to C = 30, 000 ×

2
= ₹ 6, 000
10

Commission to
3
D = 30, 000 ×
10
= ₹ 9, 000

WN2: Calculation of Profit Share of each Partner

 Profit available for Distribution = 1,80,000 − 30,000 = ₹ 1,50,000
Profit sharing ratio = 4 : 3 : 2 : 1
A's Profit Share = 1, 50, 000 ×
4

10
= ₹ 60, 000

B's Profit Share

3
= 1, 50, 000 ×
10
= ₹ 45, 000

C's PRofit Share = 1, 50, 000 ×

2

10
= ₹ 30, 000

D's Profit Share

1
= 1, 50, 000 ×
10
= ₹ 15, 000

12. Calculate interest on drawings of Mr. Ashok @ 10% p.a. for the year ended
31st March, 2018, in each of the following alternative cases:
Case 1: If he withdrew ₹ 7,500 in the beginning of each quarte. Case 2: If
he withdrew ₹ 7,500 at the end of each quarter. Case 3: If he withdrew ₹
7,500 during the middle of each quarter.

Ans. : Case 1: When equal amount is withdrwan in the beginning of quarter, the interest
on drawings is calculated for an average period 7.5 months.
Interest on Drawing = Total Drawing × Rate
×
7.5

100 12

interest on Ashok's Drawings = 30, 000 ×

10 7.5
∴ ×
100 12

= ₹ 1, 875

Case 2: When equal amount is withdrawn at the end of each quarter, the interest on draw
is calculated for an average period of 4.5 months.
Interest on Drawings = Total Drawings ×
Rate 4.5
×
100 12

Interest on Ashok's Drawings = 30, 000 ×

10 4.5
∴ ×
100 12

= ₹ 1, 125

Case 3: When equal amount is withdrawn in the middle of each quarter, the interest on
drawings is calculated for an average period of 6 months.
Interest on Drawing = Total Drawings ×
Rate 6
×
100 12

Interest on Ashok's Drawings = 30, 000 ×

10 6
×
100 12

= ₹ 1, 500

* questions of 4 marks each. [4]

13. Ram, Shyam and Mohan were partners in a firm sharing profits and losses in
the ratio of 2 : 1 : 2. Their capitals were fixed at ₹ 3,00,000, ₹ 1,00,000, ₹
2,00,000. For the year ended 31st March, 2018, interest on capital was
credited to them @ 9% instead of 10% p.a. The profit for the year before
charging interest was ₹ 2,50,000. Show your working notes clearly and pass
necessary adjustment entry.
 Ans. :

Working Notes:
WN1: Calculation of Interest on Capital 10% p.a.
Interest on Ram's Capital = 3, 00, 000 ×
10

100
= ₹ 30, 000

Interest on Shyam's Capital = 1, 00, 000 × 10

100
= ₹ 10, 000

Interest on Mohan's Capital = 2, 00, 000 ×

10

100
= ₹ 20, 000

WN2: Calculation of Interest on Capital 9% p.a.

Interest on Ram's Capital = 3, 00, 000 × 9
= ₹ 27, 000
100

Interest on Shyam's Capital = 1, 00, 000 ×

9

100
= ₹ 9, 000

Interest on Mohan's Capital = 2, 00, 000 ×

9

100
= ₹ 18, 000

WN3:

* questions of 6 marks each. [24]

14. Anita, Bimla and Cherry are three partners. On 1st April, 2017, their Capitals
stood as: Anita 1,00,000, Bimla ₹ 2,00,000 and Cherry ₹ 3,00,000. It was
decided that:
a. They would receive interest on Capital @ 5% p.a.
b. Anita would get a salary of ₹ 5,000 per month.
c. Bimla would receive commission @ 5% of net profit after deduction of
commission.
 d. 10% of the net divisible profit would be transferred to the General
Reserve.
Before the above items were taken into account, the profit for the year
ended 31st March, 2018 was ₹ 5,00,000. Prepare Profit and Loss
Appropriation Account and the Capital Accounts of the partners.
Ans. :

Working Notes:
WN1: Calculation of Interest on Capital.
Interest on Anita
5
= 1, 00, 000 × = 5, 000
100

Interest on Bimla = 2, 00, 000 ×

5

100
= 10, 000

Interest on Cherry = 3, 00, 000 × 5

= 15, 000
100

WN2: Calculation of Commission to Bimla.

Commission to Bimla = 5% on Net Profits after Commission.
Commission to Bimla = Net profit ×
Rate

100+Rate
 5
= 5, 00, 000 ×
105
= ₹ 23, 810

WN3: Calculation of Amount to be transferred to General Reserve.

Amount for General Reserve = 10% of Divisible Profit.
10
= 3, 86, 190 ×
100
= ₹ 38, 619

WN4: Calculation of Profit Share of each Partner.

Profit available for Distribution = 5,00,000 - 30,000 - 60,000 - 23,810 - 38,619 = ₹ 3,47,571
Profit Share of Anita, Bimla and Cherry each = 3, 47, 571 × 1
= ₹ 1, 15, 857
3

15. Amal, Bimal and kamal are three partners. On 1st April, 2017, their Capitals
stood as: Amal ₹ 40,000, Bimal ₹ 30,000 and Kamal ₹ 25,000. It was decided
that:
a. They would receive interest on Capital @ 5% p.a..
b. Amal would get a salary of ₹ 250 per month.
c. Bimal would receive commission @ 4% on net profit after deducting
commission, interest on capital and salary.
d. After deducting all of these 10% of the profit should be transferred to
the General Reserve.
Before the above items were taken into account, the profit for the year
ended 31st March, 2018 was ₹ 33,360. Prepare Profit and Loss Appropriation
Account and the Capital Accounts of the Partners.
Ans. :
 Working Notes:
WN1: Calculation of Interest on Capital.
Interest on Amal's Capital = 40, 000 ×
5

100
= ₹ 2, 000

Interest on Bimal's Capital = 30, 000 ×

5

100
= ₹ 1, 500

Interest on Kamal's Capital = 25, 000 ×

5

100
= ₹ 1, 250

WN2: Calculation of Commission to Bimal.

Commission to Bimal = 4% on Net Profits after Commission.
Profit after expenses = 33,360 − 4,750 − 3,000 = ₹ 25,610
Commission to Bimal = Profit after Expenses × 100+Rate
Rate
∴

4
= 25, 610 ×
104
= ₹ 985

WN3: Calculation of Amount to be transferred to General Reserve.

Amount for General Reserve = 10% of Profit.
10
= (33, 360 − 4, 750 − 3, 000 − 985) ×
100

10
= 24, 625 ×
100
= ₹ 2, 462

WN4: Calculation of Profit Share of each Partner.

Profit available for Distribution = 33,360 − 4,750 − 3,000 − 985 − 2,462
= ₹ 22,163
Profit Share of Amal, Bimal and Kamal each = 22, 163 × 1

3
= ₹ 7, 388

16. A and B are partners sharing profits in the ratio of 3 : 2 with capitals of ₹
50,000 and ₹ 30,000 respectively. Interest on cpital is agreed @ 6% p.a. B is
to be allowed an annual salary of ₹ 2,500. During the year profit prior to
interest on capital but after charging B's salary amounted to ₹ 12,500. A
provision of 5% of the profits is to be made in respect of Manager's
Commission.
Ans. :

Working Notes:
WN1: Calculation of Managers’ Commission.
Managers’ Commission = 5% on Net Profit (before Salary)
Profit before Salary = Profit after Salary + Salary = 12,500 + 2500 = ₹ 15,000
5
∴ Managers'Commision = 15, 000 ×
100
= ₹ 750

WN2: Calculation of Interest on Capital.

 Interest on A's Capital = 50, 000 ×
6

100
₹ 3, 000

Interest on B's Capital = 30, 000 ×

6

100
₹ 1, 800

WN3: Calculation of Profit Share of each Partner.

Profit available for distribution = 12,500 − 750 − 3,000 − 1,800 = ₹ 6,950
Profit sharing ratio = 3 : 2
A's Profit Share
3
= 6, 950 ×
5
₹ 4, 170

B's Profit Share = 6, 950 ×

2

5
₹ 2, 750

17. A and B are in partnership sharing profits and losses in the ratio of 3 : 2. They
decided to admit C, their Manager, as a partner with effect from 1st April,
2017, giving him 1

4
th share of profits. C, while a Manager, was in receipt of a
salary of ₹ 27,000 p.a. and a commission of 10% of the net profits after
charging such salary and commission.
In terms of the Partnership Deed, and excess amount, which C will be entitled
to receive as a partner over the amount which would have been due to him if
he continued to be the manager, would have to be personally borne by A out
of his share of profit. Profit for the year ended 31st March, 2018 amounted to
₹ 2,25,000. You are required to show Profit and Loss Appropriation Account
for the year ended 31at March, 2018.

Ans. :
Working Notes:
WN1: Calculation of Remuneration to C as a Manager
Salary to C = ₹ 27,000
Commission to C = 10% of Net Profit after Salary and Commission
Net Profit after Salary and Commission = 2,25,000 − 27,000 = ₹ 1,98,000
10
∴ Commission to C = 1, 98, 000 × = ₹ 18, 000
110

C’s remuneration as Manager = Salary + Commission = 27,000 + 18,000 = ₹ 45,000

WN2: Calculation of Profit Share of C as a Partner
Profit = ₹ 2,25,000
C's Profit Share
1
= 2, 25, 000 ×
4
= ₹ 56, 250
Part of C’s Profit Share to be borne by A = 56,250 − 45,000 = ₹ 11,250
Profit available for distribution between A and B = 2,25,000 − 45,000 = ₹ 1,80,000
A's Share of Profit
3
= 1, 80, 000 ×
5
= ₹ 1, 08, 000

B's Share of Profit

2
= 1, 80, 000 ×
5
= ₹ 72, 000

A’s Profit share after adjusting C’s deficiency = 1,08,000 − 11,250 = ₹ 96,750

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