PRACTICE WORK SHEET-1
CHAPTER: FUNDAMENTALS
ATTEND ALL QUESTIONS.
ASSESSMENT 20 MARKS
QN QUESTIONS
1. Ali the Bahadur are partners in a firm sharing profits and losses as Ali
70% and Bahadur 30%. Their respective capitals as at 1st April, 2018
stand as Ali ₹ 25,000 and Bahadur ₹ 20,000. The partners are allowed
interest on capitals @ 5% p.a. Drawings of the partners during the year
ended 31st March, 2019 amounted to ₹ 3,500 and ₹ 2,500 respectively.
Profit for the year, before charging interest on capital and annual salary
of Bahadur @ ₹ 3,000, amounted to ₹ 40,000, 10% of divisible profit is
to be transferred to Reserve.
You are asked to show Profit and loss appropriation a/c, Partners'
Current Account and Capital Accounts and journals with narrations and
format for recording the above transactions.
2. X and Y entered into partnership on 1st April, 2017. Their capitals as on
1st April, 2018 were ₹ 2,00,000 and ₹ 1,50,000 respectively. On 1st
October, 2018, X gave ₹ 50,000 as loan to the firm. As per the
provisions of the partnership Deed:
(i) 20% of Profits before charging interest on Drawings but after making
appropriations to be transferred to General Reserve.
(ii) Interest on capital at 12% p.a. and Interest on Drawings @ 10% p.a.
(iii) X to get monthly salary of ₹ 5,000 and Y to get salary of ₹ 22,500
per quarter.
(iv) X is entitled to a commission of 5% on sales. Sales for the year were
₹ 3,50,000.
(v) Profit to be shared in the ratio of their capitals up to ₹ 1,75,000 and
balance equally.
Profit for the year ended 31st March, 2019 before allowing or charging
interest was ₹ 4,61,000. The drawings of X and Y were ₹ 1,00,000 and
₹ 1,25,000 respectively.
Pass the necessary Journal entries relating to appropriation out of profit.
Prepare Profit and Loss Appropriation Account and the Partners' Capital
Accounts.
3. Following differences have arisen among P, Q and R. State who is
correct in each case:
(a) P used ₹ 20,000 belonging to the firm and made a profit of ₹ 5,000.
Q and R want the amount to be given to the firm?
(b) Q used ₹ 5,000 belonging to the firm and suffered a loss of ₹ 1000.
He wants the firm to bear the loss?
(c) P and Q want to purchase goods from A Ltd., R does not agree?
(d) Q and R want to admit C as partner, P does not agree?
4. X and Y are partners sharing profits in the ratio of 3 : 2 with capitals of
₹ 8,00,000 and ₹ 6,00,000 respectively. Interest on capital is agreed @
5% p.a. Y is to be allowed an annual salary of ₹ 60,000 which has not
been withdrawn. Profit for the year ended 31st March, 2019 before
interest on capital but after charging Y's salary amounted to ₹ 2,40,000.
A provision of 5% of the profit is to be made in respect commission to
the manager. Prepare an account showing the allocation profits.
5. A and B are partners sharing Profit and Loss in the ratio 3: 2 having
Capital Account balances of ₹ 50,000 and ₹ 40,000 on 1st April, 2018.
On 1st July, 2018, A introduced ₹ 10,000 as his additional capital
whereas B introduced only ₹ 1,000. Interest on capital is allowed to
partners @ 10% p.a.
Calculate interest on capital for the financial year ended 31st March,
2019.
6. Kanika and Gautam are partners doing a dry cleaning business in
Lucknow, sharing profits in the ratio 2 : 1 with capitals ₹ 5,00,000 and
₹ 4,00,000 respectively. Kanika withdrew the following amounts during
the year to pay the hostel expenses of her son:
1st April ₹ 10,000
1st June ₹ 9,000
1st ₹ 14,000
November
1st
₹ 5,000
December
Gautam withdrew ₹ 15,000 on the first day of April, July, October and
January to pay rent for the accommodation of his family.
He also paid ₹ 20,000 per month as rent for the office of partnership
which was in a nearby shopping complex.
Calculate interest on drawings @ 6% p.a.
7. Ram and Mohan are partners in a business. Their capitals at the end of
the year were ₹ 24,000 and ₹ 18,000 respectively.
During the year, Ram's drawings and Mohan's drawings were ₹ 4,000
and ₹ 6,000 respectively.
Profit (before charging interest on capital) during the year was ₹
16,000.
Calculate interest on capital @ 5% p.a. for the year ended 31st March,
2019.
8. One of the partners in a partnership firm has withdrawn ₹ 9,000 at the
end of each quarter, throughout the year. Calculate interest on drawings
at the rate of 6% per annum.
9. C and D are partners in a firm; C has contributed ₹ 1,00,000 and D ₹
60,000 as capital. Interest in payable @ 6% p.a. and D is entitled to a
salary of ₹ 3,000 per month. In the year ended 31st March, 2019, the
profit was ₹ 80,000 before interest and salary. Divide the amount
between C and D.
10. Ram and Mohan, two partners, drew for their personal use ₹ 1,20,000
and ₹ 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is
the amount of interest chargeable from each partner?
