In the absence of Partnership Deed, interest on loan of a partner is allowed:
- Aat $8\%$ per annum.
- ✓at $6\%$ per annum.
- Cno interest is allowed.
- Dat $12\%$ per annum.
Answer: B.
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Accounting for Partnership Firms – Basic Concepts questions
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In the absence of partnership deed the profits of a firm are divided among the partners:
- AIn the ratio of capital.
- ✓Equally.
- CIn the ratio of time devoted for the firm's business.
- DAccording to the managerial abilities of the partners.
Answer: B.
View full solution →Red, Blue and White were partners in a firm sharing profits in the ratio of $1 : 2 : 2$. They decided to share future profits in the ratio of $7 : 5 : 3$ with effect from $1^{st}$ April $,2019$. Their Balance Sheet as on that date showed a balance of $₹. 22,500$ in Deferred Revenue Expenditure Account. The amount to be debited respectively to the capital accounts of Red, Blue and White for writing off Deferred Revenue Expenditure will be:
- A$₹. 7,500, ₹. 7,500,$ and $₹. 7,500$
- ✓$₹. 4,500, ₹. 9,000,$ and $₹. 9,000$
- C$₹. 10,500, ₹. 7,500,$ and $₹. 4,500$
- D$₹. 11,250, ₹. 13,250 ,$ and $₹. 11,150$
Answer: B.
View full solution →Meera, Myra and Neera were partners sharing profits in the ratio of $2 : 2 : 1.$ They decided to share future profits in the ratio of $7 : 5 : 3$ with effect from $1^{st}$ April$, 2019.$ Their Balance Sheet as on that date showed a balance of $₹. 45,000$ in Advertisement Suspense Account. The amount to be debited respectively to the capital accounts of Meera, Myra and Neera for writing off the amount in Advertisement Suspense Account will be:
- ✓$₹. 18,000, ₹. 18,000$ and $₹. 9,000$
- B$₹. 15,000, ₹. 15,000$ and $₹. 15,000$
- C$₹. 21,000, ₹. 15,000$ and $₹. 9,000$
- D$₹. 22,500, ₹. 25,500$ and $₹. 23,500$
Answer: A.
View full solution →A partner can be added to share ___________.
- ✓Only Profits
- BOnly Losses
- CBoth
- DNone
Answer: A.
View full solution →On 1.4.2013, Brij and Nandan entered into partnership to construct toilets in government girls schools in the remote areas of Uttarakhand. They contributed capitals of ₹ 10,00,000 and ₹ 15,00,000 respectively. Their profit sharing ratio was 2 : 3 and interest allowed on capital as provided in the Partnership Deed was 12% per annum. During the year ended 31.3.2014, the firm earned a profit of ₹ 2,00,000.
Prepare Profit and Loss Appropriation Account of Brij and Nandan for the year ended 31.3.2014.
Prepare Profit and Loss Appropriation Account of Brij and Nandan for the year ended 31.3.2014.
On 1-4-2013 Jay and Vijay, entered into partnership for supplying laboratory equipments to government schools situated in remote and backward areas. They contributed capitals of ₹ 80,000 and ₹ 50,000 respectively and agreed to share the profits in the ratio of 3 : 2. The partnership deed provided that interest on capital shall be allowed at 9% per annum. During the year the firm earned a profit of ₹ 7,800.
Showing your calculations clearly, prepare ‘Profit and Loss Appropriation Account’ of Jay and Vijay for the year ended 31-3-2014.
Showing your calculations clearly, prepare ‘Profit and Loss Appropriation Account’ of Jay and Vijay for the year ended 31-3-2014.
Mona, Nisha and Priyanka are partners in a firm. They contributed ₹ 50,000 each as capital three years ago. At that time Priyanka agreed to look after the business as Mona and Nisha were busy. The profits for the past three years were ₹ 15,000, ₹ 25,000 and ₹ 50,000 respectively. While going through the books of accounts Mona noticed that the profit had been distributed in the ratio of 1 : 1 : 2. When she enquired from Priyanka about this, Priyanka answered that since she looked after the business she should get more profit. Mona disagreed and it was decided to distribute profit equally retrospectively for the last three years.
- You are required to make necessary corrections in the books of accounts of Mona, Nisha and Priyanka by passing an adjustment entry.
- Identify the value which was not practised by Priyanka while distributing profits.
Complete the following journal entries left blank in the books of VK Ltd.:
Kumar and Raja were partners in a firm sharing profits in the ratio of 7 : 3. Their fixed capitals were Kumar ₹ 9,00,000 and Raja ₹ 4,00,000. The partnership deed provided 'for the following but the profit for the year was distributed without providing for:
Pass the adjustment entry.
- Interest on capital@ 9% per annum.
- Kumar's salary ₹ 50,000 per year and Raja's salary ₹ 3,000 per month.
Pass the adjustment entry.
Singh and Gupta decided to start a partnership firm to manufacture low cost jute bags as plastic bags were creating many environmental problems. They contributed capitals of ₹ $1,00,000$ and ₹ $50,000$ on $1^{st}$ April, $2012$ for this. Singh expressed his willingness to admit Shakti as a partner without capital, who is specially abled but a very creative and intelligent friend of his. Gupta agreed to this. The terms of partnership were as follows:
View full solution →- Singh, Gupta and Shakti will share profits in the ratio of $2 : 2 : 1$.
- Interest on capital will be provided @ $6\%$ p.a.
- Identify any two values which the firm wants to communicate to the society.
- Prepare Profit and Loss Appropriation Account for the year ending $31^{st}$ March, $2013$.
A and B entered into partnership on 1st April 2009 without any partnership deed. They introduced capitals of ₹ 5,00,000 and ₹ 3,00,000 respectively. On 31st October 2009, A advanced ₹ 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 31.3.2010 showed a profit of ₹ 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 profit between the partners and prepare the Capital A/c of both the partners and Loan A/c of 'A'.
The Profit and Loss Account for the year ended 31.3.2010 showed a profit of ₹ 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 profit between the partners and prepare the Capital A/c of both the partners and Loan A/c of 'A'.
A, Band C were partners in a firm. Their capitals were A ₹ 30,000, B Rs. 20,000 and C ₹ 10,000 respectively. According to the partnership deed they were entitled to an interest on capital @ 5% p.a. In addition B was also entitled to draw a salary of ₹ 500 per month. C was entitled to a commission of 5% on the profits after charging the interest on capital, but before charging the salary payable to B. The net profits for the year were ₹ 30,000 distributed’ in the ratio of their capitals without providing for any of the above adjustments. The profits were to be shared in the ratio of 2 : 1 : 2. Pass the necessary adjustment entry showing the workings clearly.
A, Band C were partners in a firm having capitals of ₹ 80,000; ₹ 80,000; and ₹ 40,000 respectively. Their current account balances were A : ₹ 10,000; B : ₹ 5,000 and C : ₹ 2,000 (Dr). According to the partnership deed the partners were entitled to interest on capital @ 5% p.a. C being the working partner was also entitled to a salary of ₹ 6,000 p.a. The profits were to be divided as follows:
- The first ₹ 20,000 in proportion to their capitals.
- Next ₹ 30,000 in the ratio of 5 : 3 : 2.
- Remaining profits to be shared equally.
Kumar and Raja were partners in a firm sharing profits in the ratio of 7 : 3. Their fixed capitals were: Kumar Rs. 9,00,000 and Raja Rs. 4,00,000. The partnership deed provided for the following but the profit for the year was distributed without providing for: .
- interest on capital @ 9% per annum.
- Kumar’s salary Rs. 50,000 per year and Raja’s salary Rs. 3,000 per month.
Rajeev, Sanjeev and Jatin were partners in a firm manufacturing blankets. They were sharing profits in the ratio of $5 : 3 : 2.$ Their capitals on $1^{st}$ April, $2012$ were ₹ $1,00,000$, ₹ $2,00,000$ and ₹ $4,00,000$ respectively. After the flood in Uttarakhand, all partners decided to help the flood victims personally.
For this Rajeev withdrew ₹ $10,000$ from the firm on $1^{st}$ October, $2012$. Sanjeev instead of withdrawing cash from the firm took blankets amounting to ₹ $14,000$ from the firm and distributed those to the flood victims. On the other hand, Jatin withdrew ₹ $1,50,000$ from his capital on $31^{st}$ December, $2012$ and set up a centre to provide medical facilities in the flood affected area.
The partnership deed provides for charging interest on drawings $@ 6\%$ p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values which the partners wanted to communicate to the society.
View full solution →For this Rajeev withdrew ₹ $10,000$ from the firm on $1^{st}$ October, $2012$. Sanjeev instead of withdrawing cash from the firm took blankets amounting to ₹ $14,000$ from the firm and distributed those to the flood victims. On the other hand, Jatin withdrew ₹ $1,50,000$ from his capital on $31^{st}$ December, $2012$ and set up a centre to provide medical facilities in the flood affected area.
The partnership deed provides for charging interest on drawings $@ 6\%$ p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values which the partners wanted to communicate to the society.
Anju, Manju and Ruchi were partners in a firm trading in medicines. They were sharing profits in the ratio of $5: 3: 2$.
Their capitals on $1^{\text {st }}$ April, $2012$ were ₹ $3,00,000$, ₹ $5,00,000$ and ₹ $7,00,000$ respectively.
After the flood in Uttarakhand, all partners decided to help the flood victims personally.
For this Anju withdrew ₹ $30,000$ from the firm on $1^{\text {st }}$ August, $2012$. Manju instead of withdrawing cash from the firm took medicines amounting to ₹ $25,000$ from the firm and distributed those to the flood victims. On the other hand, Ruchi withdrew ₹ $1,50,000$ from her capital on $1^{\text {st }}$ December, $2012$ and provided the necessary items of daily use in the flood affected area.
The partnership deed provides for charging interest on drawings @ 6\% p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values which the partners wanted to communicate to the society.
View full solution →Their capitals on $1^{\text {st }}$ April, $2012$ were ₹ $3,00,000$, ₹ $5,00,000$ and ₹ $7,00,000$ respectively.
After the flood in Uttarakhand, all partners decided to help the flood victims personally.
For this Anju withdrew ₹ $30,000$ from the firm on $1^{\text {st }}$ August, $2012$. Manju instead of withdrawing cash from the firm took medicines amounting to ₹ $25,000$ from the firm and distributed those to the flood victims. On the other hand, Ruchi withdrew ₹ $1,50,000$ from her capital on $1^{\text {st }}$ December, $2012$ and provided the necessary items of daily use in the flood affected area.
The partnership deed provides for charging interest on drawings @ 6\% p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values which the partners wanted to communicate to the society.
Seema, Tanuja and Tripti were partners in a firm trading in garments. They were sharing profits in the ratio of $5: 3: 2$. Their capitals on $1^{\text {st }}$ April, $2012$ were ₹ $3,00,000$, ₹ $4,00,000$ and ₹ $8,00,000$ respectively. After the flood in Uttarakhand, all partners decided to help the flood victims personally.
For this Seema withdrew ₹ $20,000$ from the firm on $15^{\text {th }}$ September, $2012$. Tanuja instead of withdrawing cash from the firm took garments amounting to ₹ $24,000$ from the firm and distributed those to the flood victims. On the other hand, Tripti withdrew ₹ $2,00,000$ from her capital on $1^{\text {st }}$ January, $2013$ and provided a mobile medical van in the flood affected area.
The partnership deed provides for charging interest on drawings @ $6\%$ p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values which the partners wanted to communicate to the society.
View full solution →For this Seema withdrew ₹ $20,000$ from the firm on $15^{\text {th }}$ September, $2012$. Tanuja instead of withdrawing cash from the firm took garments amounting to ₹ $24,000$ from the firm and distributed those to the flood victims. On the other hand, Tripti withdrew ₹ $2,00,000$ from her capital on $1^{\text {st }}$ January, $2013$ and provided a mobile medical van in the flood affected area.
The partnership deed provides for charging interest on drawings @ $6\%$ p.a. After the final accounts were prepared it was discovered that interest on drawings had not been charged. Give the necessary adjusting journal entry and show the working notes clearly. Also state any two values which the partners wanted to communicate to the society.
Ahmad, Bheem and Daniel are partners in a firm. On $1^{\text {st }}$ April $2011$ the balance in their capital accounts stood at $₹$ $8,00,000$, ₹ $6,00,000$ and $₹ 4,00,000$ respectively. They shared profits in the proportion of $5: 3: 2$ respectively. Partners are entitled to interest on capital $@5\%$ per annum and salary to Bheem @ ₹ $3,000$ per month and a commission of ₹ $12,000$ to Daniel as per the provisions of the partnership deed.
Ahmad's share of profit, excluding interest on capital, is guaranteed at not less than, ₹ $25,000$ p.a, Bheem's share of profit, including interest on capital but excluding salary, is guaranteed at not less than ₹ $55,000$ p.a. Any deficiency arising on that account shall be met by Daniel. The profits of the firm for the year ended $31^{\text {st }}$ March $2012$ amounted to ₹ $2,16,000$. Prepare 'Profit and Loss Appropriation Account' for the year ended 31 ${ }^{\text {st. }}$ March $2012$.
View full solution →Ahmad's share of profit, excluding interest on capital, is guaranteed at not less than, ₹ $25,000$ p.a, Bheem's share of profit, including interest on capital but excluding salary, is guaranteed at not less than ₹ $55,000$ p.a. Any deficiency arising on that account shall be met by Daniel. The profits of the firm for the year ended $31^{\text {st }}$ March $2012$ amounted to ₹ $2,16,000$. Prepare 'Profit and Loss Appropriation Account' for the year ended 31 ${ }^{\text {st. }}$ March $2012$.
Amar, Karan and Varun were partners in a firm manufacturing garments. They were sharing profits in the ratio of $5: 3$ :2. On $1^{\text {st }}$ April, $2012$ their capitals were ₹ $3,00,000$, ₹ $4,00,000$ and ₹ $5,00,000$ respectively. After the flood in Uuaranchal, all partners decide to personally help the flood victims. For this Amar withdrew ₹ $30,000$ from the firm on $1^{\text {st }}$ september $2012$, Karan, instead of withdrawing cash from the flrm took garments amounting to ₹ $36,000$ from the frm and distributed to the flood victims. on the other hand, varun withdrew ₹ $1,50,000$ from his capital on $1^{\text {st }}$ January, $2013$ and started a school to provide elementary education in the flood affected area.
The partnership deed provides for charging interest on drawing $@ 6\%$ p.a. After the Final Accounts were prepared, it was discovered that interest on drawings had not been charged.
Give the necessary adjusting joumal entry and show the working notes clearly. Also state any two values that the partners wanted to communicate to the society.
View full solution →The partnership deed provides for charging interest on drawing $@ 6\%$ p.a. After the Final Accounts were prepared, it was discovered that interest on drawings had not been charged.
Give the necessary adjusting joumal entry and show the working notes clearly. Also state any two values that the partners wanted to communicate to the society.
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