TCA VYAS - The Commerce Academy

STD 12 Commerce Accountancy Total Marks : 30

SECTION A

* Choose The Right Answer From The Given Options.[1 Marks Each] [7]
1. The interest on Capital Accounts of Partners under the Fluctuating Capital Account
Method is credited to:
a. Interest Account.
b. Profit and Loss Account.
c. Partners' Capital Accounts.
d. None of these.

Ans. :
c. Partners' Capital Accounts.
2. Interest on partners' drawings under Fluctuating Capital Accounts is debited to:
a. Partner's Capital Account.
b. Profit and Loss Account.
c. Drawings Account.
d. None of these.

Ans. :
a. Partner's Capital Account.
3. Partners' Current Accounts are opened when their Capital Accounts are:
a. Fixed.
b. Fixed and fluctuating both.
c. Fluctuating.
d. None of these.

Ans. :
a. Fixed.
4. In the absence of an agreement to the contrary, partners share profits and losses in the:
a. Ratio of their capitals in the beginning of the year.
b. Ratio of their capitals at the end of the year.
c. Ratio of average capital.
d. Equal ratio.

Ans. :
d. Equal ratio.
5. In the absence of an agreement to the contrary, the partners are:
a. Entitled for 6% interest on their capitals, only when there are profits.
b. Entitled for 9% interest on their capitals, only when there are profits.
c. Entitled for interest on capital at the bank rate, only when there are profits.
d. Not entitled for any interest on their capitals.

Ans. :
d. Not entitled for any interest on their capitals.
6. Interest payable on the capitals of the partners is charged to:
a. Profit and Loss Account.

[1]
 b. Profit and Loss Adjustment Account.
c. Realisation Account.
d. Profit and Loss Appropriation Account.

Ans. :
d. Profit and Loss Appropriation Account.
7. Current Account of a partner:
a. Will always have a credit balance.
b. Will always have a debit balance.
c. May have a debit balance or a credit balance.
d. Can never have a debit balance.

Ans. :
c. May have a debit balance or a credit balance.

* questions of 3 marks each. [9]

8. 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:

9. A, B and C are partners in a firm. A and B are to get annual salary of ₹ 1,20,000 p.a.
each as they are fully involved in the business. Net profit for the year is ₹ 4,80,000.
Determine the share of profit to be credited to each partner.

[2]
 Ans. :

10. 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
Rate
Partners' Commission = Net Profit ×
100+Rate

20
= 1, 80, 000 ×
100+20

20
= 1, 80, 000 × = ₹ 30, 000
120

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

[3]
 2
∴ Commission to A = 30, 000 ×
10
= ₹ 6, 000

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

2
Commission to C = 30, 000 × = ₹ 6, 000
10

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

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
4
A's Profit Share = 1, 50, 000 × = ₹ 60, 000
10

3
B's Profit Share = 1, 50, 000 × = ₹ 45, 000
10

2
C's PRofit Share = 1, 50, 000 ×
10
= ₹ 30, 000

1
D's Profit Share = 1, 50, 000 ×
10
= ₹ 15, 000

* questions of 4 marks each. [8]

11. Mita and Usha are partners in a firm sharing profits in the ratio of 2 : 3. Their Capital
Accounts as on 1st April, 2015 showed balances of ₹ 1,40,000 and ₹ 1,20,000
respectively. The drawings of mita and Usha during the year 2015-16 were ₹ 32,000 and
₹ 24,000 respectively. Both the amounts were withdrawn on 1st January 2016.
It was subsequently found that the following items had been omitted while preparing
the final accounts for the year ended 31st March, 2016:
a.Interest on Capital @ 6% p.a.
b.Interest on Drawings @ 6% p.a.
c.Mita was entitled to a commission of ₹ 8,000 for the whole year.
Showing your working clearly, pass a rectifying entry in the books of the firm.

Ans. :

[4]
12. A, B and C are partners in a firm. Net profit of the firm for the year ended 31st march,
2018 is ₹ 30,000, which has been duly distributed among the partners, in their agreed
ratio of 3 : 1 : 1 respectively. It is discovered on 10th April, 2018 that the
undermentioned transactions were not passed through the books of account of the firm
for the year ended 31st March, 2018.
a. Interest on Capital @ 6% per annum, the capital of A, B and C being ₹ 50,000; ₹
40,000 and ₹ 30,000 respectively.
b. Interest on drawings: A ₹ 350; B ₹ 250; C ₹ 150.
c. Partners' Salaries: A ₹ 5,000; B ₹ 7,500.
d. Commission due to A (for some special transaction) ₹ 3,000.
You are required to pass a Journal entry, which will not affect Profit and Loss Account of
the firm and rectify the position of partners inter se.

Ans. :

[5]
* questions of 6 marks each. [6]
13. A, B and C were partners in a firm having capitals of ₹ 50,000 ; ₹ 50,000 and ₹ 1,00,000
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 an interest
on Capital @ 10% p.a. C being the working partner was also entitled to a salary of ₹
12,000 p.a. The profits were to be capitals:
a. The first ₹ 20,000 in proportion to their capitals.
b. Next ₹ 30,000 in the ratio of 5 : 3 : 2.
c. Remaining profits to be shared equally.
The firm earned net profit of ₹ 1,72,000 before charging any of the above items.
Prepare Profit and Loss Appropriation Account and pass necessary Journal entry for the
appropriation of profits.

Ans. :

[6]
Working Notes:
WN1: Calculation of Interest on Capital
10
Interest on A's Capital = 50, 000 × = ₹ 5, 000
100

10
Interest on B's Capital = 50, 000 × = ₹ 5, 000
100

10
Interest on C's Capital = 1, 00, 000 × = ₹ 10, 000
100

WN2: Calculation of Profit Share of each Partner

Profits available for Distribution = 1,72,000 − 20,000 − 12,000 = ₹ 1 ,40,000
a. Distribution of first ₹ 20,000 in the Capital Ratio i.e. 1 : 1 : 2
1
A's Profit Share = 20, 000 × = ₹ 5, 000
4

1
B's Profit Share = 20, 000 × = ₹ 5, 000
4

2
C's Profit Share = 20, 000 × = ₹ 10, 000
4

b. Distribution of Next ₹ 30,000 in the ratio of 5 : 3 : 2

5
A's Profit Share = 30, 000 × = ₹ 15, 000
10

3
B's Profit Share = 30, 000 × = ₹ 9, 000
10

2
C's Profit Share = 30, 000 ×
10
= ₹ 6, 000

c. Remaining Profit available for distribution = ₹ 1,40,000 − 20,000 − 30,000 = ₹

90,000. This profit of ₹ 90,000 is to be shared equally by the partners.
1
A, B and C each will get = 90, 000 × = ₹ 30, 000
3

Therefore,
Total Profit Share of A = 5,000 + 15,000 + 30,000 = ₹ 50,000
Total Profit Share of B = 5,000 + 9,000 + 30,000 = ₹ 44,000
Total Profit Share of C = 10,000 + 6,000 + 30,000 = ₹ 46,000

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