Accountancy- Class12- Chapter 1- Fundamentals of Partnership

 Q.1 What is the status of partnership from an accounting viewpoint ?

Q.2 List the items that may appear on the debit side and credit side of a partner's fluctuating capital account.

Q.3 Give two points of difference between Profit and Loss and profit and loss appropriation A/c.

Q4. A, B and C are partners in a firm having fixed capital of Rs. 80,000, Rs. 40,000 and Rs. 50,000 respectively sharing profits as 7 : 6 : 4. The rate of interest on capital was agreed at 10% p.a. but was wrongly credited to them @ 12% p.a. Give the necessary adjustment entry to adjust the balance of partners capital a/c.  

Q5. P, Q and R are partners with capitals of Rs. 40,000 , Rs. 30,000 and Rs. 20,000 respectively. The partnership deed provided the following :

(1) R to get salary Rs. 2,000 p.a.

(2) Q to get commission Rs. 1,500

(3) P’s loan Rs. 20,000 @ 6% p.a.

(4) Drawings of partners were : P : Rs. 5,000 ; Q : Rs. 4,000 and R : Rs. 3,000

(5) Profit sharing ration 2 : 1 : 1

The profits for the year ended 31st December 2008 without taking the above facts amounted to Rs. 12,700.

Prepare Profit & Loss Appropriation A/c and Partners’ capital a/c.

Q6. Which of the following statements will be applicable to Partnership firm in the absence of Partnership deed? (Any one of the following).

i) Salary allowed to a partner for extra work done.

ii) Interest on capital of partners will be 5% p.a.

iii) Interest on partner’s loan @ 6% p.a.

iv) Profit sharing ratio.

Q.7. A and B entered into partnership on 1st April, 2010 without any partnership deed. They

introduced capitals of Rs. 5, 00,000 and Rs. 3, 00,000 respectively. On 31st October, 2010, A advanced Rs. 2, 00,000 by way of loan to the firm without any agreement as to interest. The Profit and Loss Account for the year ended 31032011 showed a profit of Rs. 4, 30,000 but the partners could not agree upon the amount of interest on loan to be charged and the basis of division of profits. Pass a Journal Entry for the distribution of the Profits between the partners and prepare the Capital A/cs of both the partners and Loan A/ c of ‘A’.

Q8.Manoj Sahil and Dipankar are partners in a firm sharing profits and losses equally. They have omitted interest on Capital @10% per annum for three years ended on 31st March, 2011. Their fixed Capital on which interest was to be calculated throughout the were :

Manoj Rs.3,00,000

Sahil Rs.2,00,000

Dipankar Rs.1,00,000

Give the necessary adjusting journal entry with working notes.

Q9. A, Band C are partners with fixed capitals of Rs. 2,00,000, Rs. 1,50,000 and Rs. 1,00,000 respectively. The balance of current accounts on 1st January, 2004 were A Rs. 10,000 (Cr.); B Rs. 4,000 (Cr.) and C Rs. 3,000 (Dr.). A gave a loan to the firm of Rs. 25,000 on 1st July, 2014. The Partnership deed provided for the following:-

(i) Interest on Capital at 6%.

(ii) Interest on drawings at 9%. Each partner drew Rs. 12,000 on 1st July, 2014.

(iii) Rs. 25,000 is to be transferred in a Reserve Account.

(iv) Profit sharing ratio is 5:3:2 upto Rs. 80,000 and above Rs. 80,000 equally.

Net Profit of the firm before above adjustments was Rs. 1,98,360.

From the above information prepare Profit and Loss Appropriation Account, Capital and Current Accounts of the partners.

Q10. A and B were partners in a firm sharing profits and losses in the ratio of 3:2. They admit

C for 1/6th share in profits and guaranteed that his share of profits will not be less then Rs.

25,000. Total profits of the firm were Rs. 90,000. Calculate share of profits for each

partner when:

1. Guarantee is given by firm.

2. Guarantee is given by A

3. Guarantee is given by A and B equally.