EXERCISE

Partnership Deed
1. In the absence of Partnership Deed, state the provisions of the Partnership Act, 1932 rolsi.
(a) Salaries of partners, (b) Interest on partners' relating to:
(c) Interest on loan by partne, (d) Division of profit,
capitals,
(e) Interest on partners' drawings, (f) Interest on Loan given to
Ans.:(a) Not allowed; (b) Not allowed; (c) 6% p.a; (d) Equal; (e) Not charged; partners
(f) Net
2. Mahesh, Ramesh and Suresh are partners in a firm. They do not have a Partnership Deed. At tho. Not chorne
frst year of the business, they faced the following problems:
(a) Mahesh wants that interest on capital should be allowed to the partners but Ramesh and c
not agree.
(b) Ramesh wants that the partners should be allowed to draw salary but Mahesh and
Suresh do - net

(c)Mahesh and Ramesh want that Suresh should pay interest on loan given to him tagree
does not agree.
by the firm but Sure
rec
(d) Mahesh and Ramesh having contributed larger amounts of capital, desire that the
distributed in the ratio of their capital contribution but Suresh does not profits should
agree.
State how will these disputes be settled.
[Ans.: (a) Mahesh's claim is not accepted,
(b) Ramesh's claim is not accepted, (c) Mahesh and Ramecn
claim is not accepted; Suresh will not pay interest in the absence of
agreement, an:
(d) Profits or losses would be distributed among the partners equal
The claim made by Mahesh and Ramesh is not accepted.
3. Following differences have arisen among P Q and R. State who is correct in each
case:
(a) Pused 50,000 belonging to the firm and earned a profit of 5,000. Q and R want the amount to
given to the firm.
(b) Qused 10,000 belonging to
the firm and incurred a loss of 1,000. He wants the firm to
bear the C
(c) P andQ want to purchase goods from Star Ltd., R does not
agree.
(d) Q and R want to admit W as partner, P does not
agree.
(e) Rhad given loan of 2,00,000 to the firm and demands
interest 10% p.a. Pand Q do not want u
the interest.
[Ans.: (a) P must pay-55,000; (b) Q
must pay- 10,000; (c) Goods may be bought trom
(d) W cannot be admitted; (e) R will get intereste o
4.
Barun, Tarun and Shivam are partners in a firm and do not have a
further capital Partnership Deed. Barun the h
of 5,00,000 on 1st October, 2022. Whereas Shivam took loan
1st October, 2022. Disputes
have arisen among them on the of 50,000 fro
(a) Barun demands interest @ 10% following:
p.a. on 5,00,000 being his extra
(6) Tarun desires capital. shae
that his son Deep should be admitted as partner and he will give him
Barun and Shivam do not
agree.
na
a tthe
(c) Barun and Tarun are
of the view that Shivam should be charged interest on loan
lending rate of the banks, which is 12% p.a. tro
thevie
(d) Tanun has
withdrawn 50,000 from the firm for his personal use. Barun and o f

thatTarun should be charged interest @ 10% shiva

Give solution to each issue of p.a.
dispute. an wilayt
Ans.: In the absence of
Partnership Deed, the provisions of Indian Partnership edas

(a) Interest will not be

paid on extra capital introduced, (b) Deep
Barun and Shivam don't carn Sr hiya
agree, (c) No interest willbe from iromTan
be chargedCharged
ofinterest was not agreed, (d) Interest on drawings will not DE
 Chapter 1 Accountingfor Partnership Firms-Fundamentals 1.87

Harshad and Dhiman are in partnership since 1st April, 2022. No partnership agreement was made. They
rontributed 4,00,000 and 1,00,000 respectively as capitals. In addition, Harshad had given loan of
F1.00,000 to the firm on 1st October, 2022. Due to long illness, Harshad could not participate in business
from 1st August, 2022 to 30th September, 2022. Profit for the year ended 31st March, 2023 was
activities
1,80,000. Dispute has arisen between Harshad and Dhiman.
Harshad Claims:
0 He should be given interest @ 10% per annum on capital and loan
) Profit should be distributed in the ratio of capital.
Dhiman Claims:
) Profnts should be distributed equally;
he managed the business in the
(i) He should be allowed R 2,000 p.m. as remuneration for the period
absence of Harshad;
(G) Interest on Capital and loan should be allowed @ 6% p.a.
Also prepare Profit& Loss Appropriation
You are required to settle the dispute between Harshad and Dhiman.
(NCERT, Modified)
Account.
Harshad gets 3,000 as Interest on Loan.]
[Ans.: Harshad and Dhiman each gets 88,500 as profit and
not entitled to any interest on capital, but he is entitled to interest
[Hints: Harshad's Claim: (a) Harshad is
on his loan @ 6% p.a.;
1932.
(b) Profits will be distributed equally as per Partnership Act,
Dhiman's Claim: (a) His claim is right that profits should be shared equally;
(b)No remuneration will be allowed to Dhiman;
C)Interest on capital will not be allowed.]

Interest on Loan by Partner to the Firm and

and losses in the ratio of 2:3 with capitals of F 2,00,000
6. a n d Yare partners sharing profits Xand Ygave loans ofR80,000 and 40,000 respectively
to the
3,00,000 respectively. On 1st October, 2022,
in each of the following
for the year ended 31st March, 2023
firm. Show distribution of profits/losses
alternative cases:
for the amounted to 21,000.
year
Case 1. If the profit before interest amounted to 3,000.
before interest for the year
Case 2. If the profit the amounted to 5,000.
for year
Case 3. Ifthe profit before interest the year amounted to R 1,400.
Case 4. If the loss before interest for Loan by YT
1,200;
[Ans.: Interest on Loan by XR 2,400; Interest on
Case 2. Loss: X R 240; YT 360:
Case 1. Profit: XT 6,960; YF 10,440;
Case 4. Loss: X R 2,000; Y 3,000.]
Case 3. Profit: XR 560: YT 840;
against profit.]
Hint: Interest on Loan by partner is a charge had given loan to the firm of
profits in the ratio of 3:2. They
firm sharing interest on loans
S i t a and Geeta are partners in a Partnership Deed is silent on
1st October, 2022. The the firm closes its books
30,000 in their profit-sharing ratio
on
the firm to the partners, assuming
rom partners. Compute interest payable by
31st March. 6/100x6/12 =
7 540:
every year on
[Ans.: Interest payable Sita-R
to 30,000 x 3/5 x
6/12=R 360]
30,000 x 2/5 x 6/100 x
Interest payable to Geeta- loangiven
interest@6% p.a.is payable on theamount of
Partnership Act, 1932, 2022 to
IHint: According to the Indian 6 months, i.e., from 1st October,
will be payable for
In the present case, interest
by partners.
31st March, 2023.] 1,20,000 and 60,000
2:3 with capitals of
the profits in the ratio of 1,20,000 respectively to
8. sharing of ? 2,40,000 and ?
Dat ànd Ball are partners 2022, Bat and Ball gave loans rent of T 5,000. Loss
espectively. On 1st October, property for business for a monthly distribution of
use his Show
allowed the firm to interest amounted
to R 9,000.
ne hrm. Bat had 2023 before rent and Bat-R31,920; Ball- 47,880.]
Or year ended 31st March,
the [Ans.: Share of Loss:
profit/loss. are charges against profit.
Rent
llnt: Interest on Loan by partner and
 1.88 Double Entry Book Keeping-CBSE XII

9. Akhil, Sunil and Parvesh are partners sharing profits in the ratio of3:2:1. Sunil had qiven
1st November, 2022 of T4,00,000. Interest payable was agreed @ 12% p.a. Interest was paid f r m o
to February, 2023 on 1st March, 2023 and balance was yet to be paid. by cheque up
Pass the Journal entries for interest on loan by partner.
[Ans.: Interest on Loan by Sunil up to
February, 2023
Interest transferred to Profit & Loss
A/c- 20
Interest on Loan to the Firm by Partner and Loan by the Firm to Partner O.003
10. Akhil and Bimal
1st
are partners sharing profits in the ratio
of3:
2. Akhil gave loan to the firm
October, 2022. On the same date, the firm gave loan to Bimal of R 1,00,000. They do
of? 10
not h n
agreement as to interest.
Akhil had also given his personal property for firms godown at a monthly rent of T 5.000.
Firm profit of 1,03,000 (before above
earns
adjustments) for the year ended 31st March, 2023, Shous
distribution of profit for the year. the
[Ans.: 40,000 [R 1,03,000 -F 3,000) (interest on Loan by Akhil)-R60,000
(rent)] will
distributed in the ratio of 3: 2. Akhil-R 24,000;
Bimal-- 16,001
[Hint: In the absence of agreement, Akhil will get interest @ 6% p.a. on loan given by him. Interest will
not
be charged on loan to Bimal by the firm. Also, rent will be paid to Akhil as
per the agreement]
11. Nirmal and Pawan are partners sharing profits in the ratio of 3 : 2. The firnm had
given loan to Pawan of
5,00,000 on 1st April, 2022. Interest was to be charged @ 10% p.a. The firm took loan of R2,00,000 from Nirmal
on 1st October, 2022. Before
giving effect to the above, the firm incurred a loss of R 10,000 for the year
ended 31st March, 2023. Determine the amount to be transferred to Profit & Loss Appropriation Account.
[Ans.: Amount ofProft transferred to Profit & Loss Appropriation A/c-734.00)
12. Ankit, Bhanu and Charu are partners in a firm sharing profits and losses equally with capital of t 250,0
each. On 1st October, 2022, Ankit and Bhanu gave loans of ? 2,50,000 each to the firm whereas Charu tok
a loan of 1,00,000 from the frm on the same date. It was agreed among the partners that Charu willbe
charged Interest @ 6% p.a. Interest on loan from partners was paid on 10th April, 2023. The firm closesi
books on 31st March each year.
Pass the Journal entries in the books ofthe frm for the year ended 31st March, 2023.
[Ans.: Interest credited to Loan Accounts of Ankit and Bhanu- 7,500 ec
Interest debited to Charu's Capital Account- 3,0
13. Atul, Jetha and Tarak are partners sharing profits equally. Jetha was given loan by the firm on 1st July,202
of T 6,00,000. Books are closed on 31st March. What Journal entries will be passed if
(a) Rate of interest is not agreed; and
(b) Rate of interest to be charged is agreed @ 10% p.a?
[Ans.: (a) Interest will not be charged. Hence,
no Journal entry
wI" 002023)-745.00

(b) Interest on Loan Jetha (upito31st March,

to
6,00.000
14.
Parul, Paresh and Rahul are partners 2022 of
in a firm. Firm gave loan to Rahul on 1st February, 2022
@ 6% p.a. Interest was paid by cheque up to February. 2023 by
of a
Interest
on
was agreed to
be charged
5th March, 2023 and balance yet to be paid by him.
was

Pass the Journal entries for interest on loan to

partner. ransferedt
[Ans.: Interest on Loan to Rahul (for
February, 2023)7 3,000; Intere 6,00
Profit & Loss A/c (up to 31st March, 2 0 2 /
Profit & Loss Appropriation Account I n t e r e s to n

15. Vinod and Mohan are partners. Vinod's Capital is 1,00,000 and Mohan's Capital is R 60,i 80.0
capital is payable @ 6% p.a. Vinod is to get
salary of 7 3,000 per month. Net Profit for
2 0 0 )

Prepare Profit & Loss Appropriation Account. t n17

[Ans.: Share ofProfit: Vinod- 17,200; Mon
 Chapter 1 Accounting for Partnership Firms-Fundamentals 1.89

16. XY and Zare parthersin a firm sharing profits in the ratio of 2:2:1. Fixed capitals ofthe partners were:
XT 5,00,000; Y 5,00,000 and z * 2,50,000 respectively. The Partnership Deed provides that interest on
capital is to be allowed @ 10% p.a. Z is to be allowed salary of 2,000 per month. Profit of the firm for the
year ended 31st March, 2023 after debiting Z's salary was4,00,000.
Prepare Profit & Loss Appropriation Account. [Ans.: Divisible Profit-T2,75,000.]
17. Xand Yare partnerssharingprofitsin the ratio of 3:2 with capitalsof 8,00,000 and 7 6,00,000respectively
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, 2023 before interest on capital but after charging
Y's salary was 2,40,00o.
A provision of 5% of the net profit is to be made in respect of commission to the Manager.
Prepare Profit & Loss Appropriation Account showing the alocation of profts
Ans.: Provision for Manager's Commision- 15,000 (ie, 5% of7 3,00,000),
Share of Proft: X- 93,000; Y-7 62,000.]
18. Atul and Mithun are partners sharing profits in the ratio of 3:2.
Balances as on 1st April, 2022 were as follows:
Capital Accounts (Fixed): Atul-T 5,00,000 and Mithun-- 6,00,000.
Loan Accounts: Atul- 3,00,000 (Cr) and Mithun-7 2,00,000 (Dr.)
Itwas agreed to allow and charge interest@ 8% p.a. Partnership Deed provided to allow interest on capital
@ 10% p.a. Interest on Drawings was charged T5,000 each.
Proft before giving effect to above was 2,28,000 for the year ended 31st March, 2023.
Prepare Profit & Loss Appropriation Account.
[Ans.: Share ofProfit:Atul-72,000; and Mithun- 48,000.]
19. Reema and Seema are partners sharing profits equaliy. The Partnership Deed provides that both Reema
and Seema will get monthly salary of7 15,000 each, Interest on Capital will be allowed 5% p.a. and
Interest on Drawings will be charged @ 10% p.a. Their capitals were R 5,00,000 each and drawings during9
the year were 60,000 each.
The firm incurred net loss of T 1,00,000 during the year ended 31st March, 2023.
Prepare Profit & Loss Appropriation Account for the year ended 31st March, 2023.
[Ans.: Loss-7 94,000; Reema's Share- 47,000;Seema's Share-47,000]
20. Bhanu and Partap are partners sharing profits equally. Their fixed capitals as on 1st April, 2022 were
and 1,00,000
8,00,000 andF 10,00,000 respectively. Their drawings during the year were 50,000
is to be allowed @10% p.a. and interest on drawings is to
respectively. Interest on Capital is a charge and
be charged@15% p.a. Net Profit for the year ended 31st March, 2023 before giving effect to the above) was

1,20,000.
Prepare Profit & Loss Appropriation Account.
Current Ac and Partap's Current Account by T 24,375 each.]
[Ans.: Loss-7 48,750; Dr. Bhanu's
PARTNERS' CAPITAL ACCOUNTS

Fixed Capital
. Amitand Sumit entered into partnership on 1st April, 2022 and invested R1,50,000 and 2,50,000 respectively
interest on capitals @ 10% p.a. It
also provided that Capital
capitals. The Partnership Deed provided for
as Accounts Method. The firm earned net profit of
shall be maintained following Fixed Capital
ACCounts
2025.
1.00,000 for the year ended 31st March,
Pass the Journal entry for interest on capital. Loss
[Ans.: Dr. Profit &
A/c
Appropriation by
40,000;

Cr. Amit's Current A/c by

15,000 and Sumit's Current A/c by 25,000.1
 Keeping-CBSE XII
1.90 Double Entry Book

Kamal and Kapil partners having

are
fixed capitals of 5,00,000 each as on March, 2022. Karna
31st March
22.
introduced further captial
of ? 1,00,000 on 1st October,
2022 whereas
withdrew 1,00,000
Kapil withdrew:

1st October, 2022 out

of capital.
is to be allowed @ 10°% p.a.
Interest on capital
March, 2023.
the year ended 31st
Thefirm earned net profit of R 6,00,000 for
interest on capital and prepare Profit & Loss Appropriation Account
Pass the Journal entry for
Ans.: Dr. Profit &Loss Appropriation A/c by ? 1,010
Ch. Kamal's Current Ac by ? 55,000 and Kapil's Current A/c bu ~a
Share of Profit: Kamal- 2,50,000 and Kapil- 2,50t 45,006
is not give. Hence, they will share profit
between Kamal and Kapil ecILall
y
Hint: Profit sharing ratio
23. Simran and Reema are partners sharing profits in the ratio of 3: 2. Their capitals as on1st Aqril, 252
Accounts had balances of 50,000 and 7 25,000 resers
were 2,00,000 each whereas Current
Interest on capital is to be allowed @ 5% p.a. Net profit of the firm for the year ended 31st March
ctively
,
202
was 3,00,000.
Pass the Journal entries for interest on capital and distribution of profit. Also prepare Profit& lee

Appropriation Account for the year.

Ans.: (i) Dr. Profit &Loss Appropriation A/c by 20,000;
Cr. Simrans Current Ac by 10,000 and Reema's Current A/c by 10,00
(i) Dr. Profit & Loss Appropriation A/c by 2,80,000;
Cr. Simran's Current A/c by 1,68,000 and Reema's Current A/c by R1,12.0)
Hint: Interest will not be allowed on Current Account balances.]

Fluctuating Capital
24. Anita and Ankita are partners sharing profits equally. Their capitals, maintained following Fluctuating
Capital Accounts Method, as on 1st April, 2022 were 5,00,000 and 4,00,000 respectively. Partnershio
Deed provided to allow interest on capital @ 10% p.a. The fim earned net profit of72,00,000 for the year
ended 31st March, 2023.
Pass the Journal entry for interest on capital.
TAns.: Dr. Profit & Loss Appropriation A/c by 90,00
Cr. Anita's Capital A/c by 50,000 and Ankita's Capital A/c by 40,00
25. Ashish and Aakash are partners sharing profits in the ratio of 3 :2.Their Capital Accounts had credit balanceso
5,00,000 and 6,00,000 respectively as on 31st March, 2023 after debit of drawings during the year o
1,50,000 and R 1,00,000 respectively. Net profit for the year ended 31st March, 2023 was 5,00.000.
Interest on capital is to be allowed @ 10% p.a.
Pass the Journal entry for interest on capital and prepare Profit & Loss
Appropriation
Ans.: (i) Dr. Profit & Loss Appropriation A/c by R 1,35,000;
Account
Cr. Ashish's
Capital A/c by 65,000 and Aakashs Capital A/c by ? 7000
i) Share of Profit: Ashish- 2,19,000 and Aakash-R 1,46,000.
[Hint: Interest on capital is allowed on opening balances of
capital.] had
26. Naresh and Sukesh are partners with capitals of 3,00,000 each as on 31st March, 2023
withdrawn 50,000 against capital on 1st October, 2022 and
ukesh
also had 1,00,000 drawings against P
drawings of? 1,00,000,
Interest on capital is to be allowed @ 10%
p.a.
Net profit for the year was 2,00,000, which
is yet to be distributed.
Pass the Journal entries for interest on
capital and distribution of profit.
82500
[Ans.: For Interest on Capital: Dr. Profit & Loss p p r o p r i a t i o n A/c by
Cr. Naresh's Capital A/c by
Appro
42,500 & Sukesht CapitalA/c by
,17,500

For
Profit distribution: Dr. Profit & Loss
Appropriation A/c
.Naresh's Capital AWc by 58.750 and Sukesh's Capital AVC y
$8750
 Chapter 1 Accounting for Partnership Firms-Fundamentals 1.91

a1 2 lav and Vijay entered into partnership for supplying laboratory equipments to government
Apil. areas. They contributed capitals of 7 80,000 and 50,000
27.
On 1st situated
remote and backward
d in rem
in the ratio of 3:2. The Partnership Deed provided that interest
chools
and agreed to share
agieed to tlhe profhts
pectively and at 9% per annum. During the year the firrn earned a profit of
allowed at
7,B00.
hall be
on
capital
Showing
tions cleatly, prepa 'Profit &loss Appropriation Account'of Jay and Vijay for the year
y o u rc a l c u l a t i o

(Delhi 2015)
March, 2014.
31st
ended Ans.: Interest on Capital: Jay 4,800; Vijay3,000.1
7
pront of net is less than the total anount of Interest on Capital, ie., 7,200 (Jay) +
liat Since the amount has been distributed in the ratio of interest claims ofJay and
3A S00 (Vijay) 11,700, the net profit
=

i.e., 7,200: R4,500 or8:

5.]
Vijay,
Interest o n Partners' Capitals
Calculation of
Accounts and the balance
in the ratio of 3: 2. The firm maintains Fluctuating Capital
dand 8 are partners Their
as on 31st March,
2020 amounted to ? 1,60,000 and ? 1,40,000 for A and B respectively.
of the same
the year were R30,000 each.
drawings during
had been provided to them.
Deed, interest on capital @ 10% p.a. on opening capitals
As per Partnership
Show your workings clearly.
Calculate opening capitals of partners given that their profit was 90,000.
(CBSE Sample Paper 2020)

[Ans.: Opening Capital: A- 1,38,364; B- 1,31,636.]

Mahadev 31st March, 2023:
ofthe Balance Sheet of Neelkant and
as on
29. Following is the extract
BALANCE SHEET as at 31st March, 2023

Liabilities
Assets

10,00,000 Sundry Assets 30,00,000

Nelkant's Capital
Mahadev's Capital 10,00,000
Neelkant's Current A/c 1,00,000
Mahadev' Current A/c 1,00,000
Proft&Loss A/c (2022-23) 8,00,000
30,00,000
30,00,000

31st March, 2023 is

Mahadev's drawings were 30,000. Profit during the year ended
During the year, 31st March, 2023. (NCERT Modifed)
10,00,000. Calculate interest on capital @ 5% p.a. for the year ending
Mahadev-7 50,000.]
[Ans.: Interest on Capital: Neelkant-R 50,000;
calculate interest on capital @ 8o p.a. for the year
D.rom the following Balance Sheet of Long and Short,
ended 31 st March, 2023:
BALANCE SHEET as at 31st March, 2023
Liabilities Assets
3,00,000
Long's Capital A/c 1,20,000| Fixed Assets
60,000
Short's Capital A/c 1,40,000 Other Assets
General Reserve 1,00,000
3,60,000
3,60,000

1,50,000
withdrew S0,000. Proht for the year was
withdrew 40,000 and Short
Ou Or
E year, Long General Keserve
a which ? 1,00,000 was transferred to
on Short's Capital-z 13,200.]
Ans.: Interest Long's Capital-* 10,800;Interest
on

31. Am 15,00,000 and R 9,00,000 respectively.

Ist April, 2022
with capitals of *
On1e dnit started business o n their capitals should be? 12,00,000 each. The necessaryadjustments
8% p.a.
in ean Der,2022, they decided that withdrawing by cheque. Interest on capital is allowed @
Com
were made by introducing or 31st March, 2023.
ended 1,08,000; Branit-R 84,000.]
e r e s t on capital for the year on Capital:
Amit-*
Ans.: Interest
 XI
1.92 Double Entry Book KeepingCBSE
towards capital. They decide to all.
10,000 respectively 3interersst
year ic
and
contribute 20,000 is 2: 3 and profit for the vear is
32. Moli and Bholi share of profits 1,500. Show
Their respective
on capital a 6% p.a.
distribution of profits: on capitals; and
for interest
When there is no agreement except
(0) the nterest on capital is charge.
a
agreement that 120:Rhet:
When there is
Bholi- 500; (i) Loss:Moli-
an
(i)
Ans.:(i) Interest on Capital:Mol1,000; 180
to Partners
Salary or Commission and losses in the ratio
of 2: 2: 1. Shiv is entitl..
Mohan and Gopal are partners sharing profits titled to
33. Shiv, year is ? 1,10,000.
commission of 10% on the net profit. Net profit for the
Ans.: Commission payable to Shiv- 1.000
Determine the amount of commission payable to Shiv.
profits and losses equally. per Partnership Deed, vinee
As
34. Abha, Bobby and Vineet are partners sharing such commission. Net profit before ch
entitled to commission of 10% on the net profit after charging 1arging
commission is 2,20,000.
[Ans.: Commission payable to Vineet- 20.00
Determine the amount of commission payable to Vineet.
firm sharing profits in the ratio of 4:3:2:1. The firm earned net profta
35. A 8, Cand Dare partners in a the Partnership Deed, partners will get commission
1,80,000 for the year ended 31st March, 2023. As per
share as 2:3:2:3.
20% of the profit after charging such commission which they will
You are required to show appropriation of profits among the partners.
[Ans.: Commission payable to the partners = 20/120 x 1,80,000 =7 30,000
which will be shared as:A-R6,000; B- 9,000; C-6,000 and D-79.000
Share of Profits: A-T 60,000; B-7 45,000; C-7 30,000 and D- 15,000
36. Xand Y are partners in a firm. X is entitled toa salary of 10,000 per month and commission of 10%
of the net profit after partners' salaries but before charging commission. Y is entitled to a salaryd
25,000 p.a. and commission of 10% of the net profit after charging all commission and partnerssalares
Net profit before providing for partners'salaries and commission for the year ended 31st March, 2023 was
7 4,20,000. Show distribution of profit.
JAns.: X's Commission-27.500; Y's Commission22,500; Net Proft-72,2500
Xand Y's Share-1,12,500each
[Hint: Y's Commission = 10/110 of 2,47,500 (i.e., R 4,20,000-R 1,20,000 (X's Salary) - 25,000
('s Salary)-7 27,500 (X's Commission)).]
Calculation of Interest on Partners' Drawings, Amount of Drawings and Rate of
on Drawings
Inter
37. Ram and Mohan, two partners, drew for their personal use 1,20,000 and 80,000. Interest is cnargroable
@6% p.a. on the drawings. What is the amount of interest
chargeable from each partner!
400)
Ans.: Interest on
Drawings: Ram- 3,600 and Mohan-
Hint: When the dates of drawings are not given, interest on total amount

of drawings for average drawings is calculated on the tola

period of 6 months.]
38. Brij and Mohan are partners in a
firm. They withdrew year
48,000 and 36,000 respectively durnytabe
evenly in the middle
of every month. According to the Partnership Deed, interest on
charged @ 10% p.a. drawing
Calculate interest on
drawings of the partners using the
TAns.: Interest on
appropriate formula. gs-F1,800J

Brij's DrawingsR 2, 400 and Interest on Mohan's

39. Dev withdrew 10,000 on 15th day Drawing
Calculate interest on Dev's
of every month. Interest on drawings was to be charged CBSE2019
Drawings.
mgs-T7200)

Ans.: Interest on Drawin

40. One of the partners in a partnership firm has ughoutthe

year. withdrawn 9,000 at the end of each quarter,

Calculate interest on drawings at the rate
of 6% per annum. (CBSESampe
0ef200
Paper

TAns.: Interest on Drawings

 Chapter 1 Accounting for Partnership Firms-Fundamentals 1.93
Dartners sharing pronts equaly. A drew regularly 4,000 in the
41. A
a n dB a
six months ended 30th tember, 2022. Calculate interest on beginning of every month for
drawings 5% p.a. for a period of
six months.
[Ans.: Interest on Drawings 350.]
lnterest on drawings will be charged for average period of 3.5 months on total drawings]
[Hint: Ih

and B are partners sharing profits equally. A drew

regularly 4,000 at the end of every month for
42. 4
six m
onthsended 30ths
h September, 2022. Calculate interest on
drawings@ 5% p.a.for a period of six months.
Ans.: Interest on Drawings- 250.]
ruint: lnterest on drawings will be charged for average period of 2.5 months on total
drawings.]
2and Care partners sharing prohts equally. C regularly
43. B.
withdrew 5,000 per month in the beginning of
the month for six months ended 30th September, 2022. Calculate interest on drawings @ 12% p.a. for the
yearended 31st March, 2023. [Ans.: Interest on Drawings- 2,850.]
Hint: Interest on drawings will be charged for 9.5 months on total drawings]
4. Calculate interest on drawings of Sanjay @ 10% p.a. for the year ended 31st March, 2023, in each of the
following alternative cases:
Case 1. If he withdrew 7,500 in the beginning of each quarter.
Case 2. If he withdrew 7,500 at the end of each quarter.
Case 3. If he withdrewR 7,500 during the middle of each quarter.
[Ans.: Interest on Drawings: Case 11,875; Case 2-3 1,125; Case 3- 1,500.]
45. The capital accounts of Tisha and Divya showed credit balances of 10,00,000 and 7,50,000 respectively
aftertaking into account drawings and net profit of 7 5,00,000. The drawings of the partners during
the year ended 31st March, 2024 were:
) Tisha withdrew 25,000 at the end of each quarter.
(i) Divya's drawings were:
31st May, 2023 20,000
1st November, 2023 17,500
1st February, 2024 12,500
Calculate interest on partners' capitals@ 10% p.a. and interest
ended 31st March, 2024.
on
partners'drawings @ 6% p.a. for the year
[Ans.: Tisha Divya
Opening Capital 8,50,000 5,50,000
Interest on Capital 85,000 55,000
Interest on Drawings 2,250 1,563]
A,8 and Care partners. During the year ended 31st March, 2023, each ofthe partners withdrew 10,000
egularly. A withdrew in the beginning of the first 6 months of the year, 8 withdrew in the middle of the
month for the first 6 months of the year and Cwithdrew at the end of the month for the first 6 months.
diculate interest on drawings@ 6% p.a. for the year ended 31st March, 2023.
[Ans.: interest on Drawings: A- 2,850; B- 2,700 and C-R 2,550.]
c u l a t e the amount of Manan's monthly drawings for the year ended 31st March, 2023, in the following
cErnative cases when Partnership Deed allows interest on drawings @ 10% p.a.:
f interest on drawings is T 1,950 and he withdrew a fixed amount in the beginning ofeach month.
finterest on drawings is T 2,400 and he withdrew a fixed amount in the middle of each month.
nterest on drawings is 2,750 and he withdrew a fixed amount at the end of each month.
[Ans.:Amount of Drawings: () 3,000; (i) 4,000; i) 5,000.]
Calculate the amount of Shiv's quarterly drawings for the year ended 31st March, 2023, in the following
ternative cases when Partnership Deed allows interest on drawings @ 12% p.a
interest on drawings is 1,500 and he withdrew a fixed amount in the beginning of each quarter.
fixed amount in the middle of each quarter.
itne r eerest on drawings is 1,200 and he withdrewa
s t on drawings is 900 and he withdrew a fixed amount at the end of each quarter.
R T 5,000; (in T 5,000.]
LAns.: Amount of Drawings: () 5,000; i)
 Keeping-CBSE XIl
1.94 Double Entry Book
withdrew R 20,000 per month
nth .

regularly as
49. Piyush, Harmesh and Atul partners. Each partner
are given belo
of the month;
in the beginning
(a) Piyush withdrew month; and
withdrew inthe middle of the
(b) Harmesh month.
the end of the
(c) Atul withdrew at
Interest on drawings charged for
the year ended 31st March, 2023
was 7 15,600, 3 14.400 and 13,2
14400.

respectively.
Determine the rate of interest charged on drawings.
[Ans.: Rate of Interest on Drawings: Piyush-12%;
Harmesh-12% and Atul
ul-12%
Drawings of Mohan in the following
cases:
50. Calculate the Rate of interest on
for the year ended 31st March.
6,000 in the beginning of each quarter
2073.
(a) If he withdrew 3 arnd
interest on drawings is T 1,500.
(b) If he withdrew 6,000 at the end ofeach quarter for the year ended 31st March, 2023 and interect
ton
drawings is 900.
(c)It he withdrew 6,000 per quarter for the year ended 31st March, 2023 and interest on drawings is F1.200

[Ans.: (a) 10%; (b) 109% and () 10%]

Profit& Loss Appropriation Account and Partners' Capital Accounts

51. Amit and Vijay started a partnership business on 1st April, 2022. Capital invested by them were 200
and 1,50,000 respectively.The Partnership Deed provided as follows:
(a) Interest on capital be allowed @ 10% p.a.
(b) Amitto get a salary of 2,000 per month and Vijay 3,000 per month.
(c) Profits are to be shared in the ratio of 3 :2.
Net Profit for the year ended 31st March, 2023 was 2,16,000. Interest charged on drawings was 2,20
for Amit and R 2,500 for Vijay.
Prepare Proft & Loss Appropriation Account
[Ans.: Share of Profit:Amit-R 75,420; Vijay-R50,280
52. A and B are partners sharing profits and losses in the ratio of 3: 1. On 1st April, 2022, their capitals wer
AR 5,00,000 and B R 3,00,000. During the year ended 31st March, 2023, the firm earned a net pront
T5,00,000. The terms of partnership are:
(a) Interest on capital is to be allowed @ 6% p.a.
(b) A will get a commission @ 2% on net sales.
(c) B will get a salary of T 5,000 per month.
(d) B will get commission of 5% on profits after deduction
of all expenses including such ssion.
commi
Partners' drawings for the year were: A 80,000 and BR 60,000. Net Sales for the 0,000.

After considering the above facts, year was 500 t and

you are required to prepare Profit & Loss
Partners' Capital Accounts. Appropriation e
[Ans.: Commission 79.050
of B-7 15,810; Share of Profit: A- 2,37,140, 012860
, 1 4 0 ; B - T 4 1 2 , 8 6 0 .

53. A, B and Cwere partners in a firm Capital A/cs: AR7,47,14 Their

Current Account balances having capitals of 50,000; 50,000 and 1,00,000 respe ely
eshiP
Deed the partners were were A: 10,000; B: 5,000 and C:7 2,000 (Dr.). According to
Capital @ 10% p.a. C being the working pai 3salso
entitled to an interest on Wa
entitled toa salary
of 7 12,000 p.a. The profits were to be distributed
(a) The first 20,000 in as:

(b) Next 30,000

proportion to their
capitals.
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
Prepare Profit & Loss Appropriation Account and pass items. appropriation
of profits. necessary Journal entry ror the Foreign20

[Ans.: Divisible
Profit-
46000

1,40,000; A's share- 50,000; B's

share- 44,000; CS Sn
 T.99
napter 1 Accountingfor Partnership Firms--Fundamentals
and naru are three parthers. On 1st April, 2022, their Capitals stood as: Amit 1,00,000, Binid
EA Amit, Binita
2 2.00,000 and Charu 3,00,000. It was decided that:
they would receive interest on Capitals @ 5% p.a.,
(a)
(b) Amit would get a salary of R 10,000 per month
(Binita would receive commission @ 5% of net profit after deduction of commission, and
10% of the net profit would be transferred to the General Reserve.
Before the above items were taken into account, profit for the year ended 31st March, 2023 was 5,00,000.
Prepare Profit & Loss Appropriation Account and the Capital Accounts of the Partners.
[Ans.: Divisible Profit- 2,76,190; Commission (Binita)-7 23,810, General Reserve- 50,000;
Share of Profit: Amit-7 92,063; Binita-7 92,063, Charu--7 92,064;
Closing Balances of Capital A/cs: Amit- 3,17,063; Binita- 3,25,873; Charu-R 4,07,064.)
55. Yadu,Vidu and Radhu were partners in a firm sharing profits in the ratio of4:3:3.Theirfixed capitals on
1st April, 2018 were 9,00,000, 5,00,000 and 7 4,00,000 respectively. On 1st November, 2018,Yadu gave
loan of 80,000 to the firm, as per the partnership agreement.
The partners were entitled to an interest on capital @ 6% p.a.
(i) Interest on partners' drawings was to be charged @ 8% p.a.

The firm earned profit of 2,53,000 (after interest on Yadu's Loan) during the year 2018-19. Partners'
drawings for the year amounted to:

Yadu-80,000,Vidu- 70,000 and Radhu- 50,000.

Prepare Profit & Loss Appropriation Account for the year ending 31st March, 2019. (CBSE 2020)
[Ans.: Share ofProft: Yadu-761,200; Vidu- 45,900; Radhu-45,900.]
[Hint: Interest on drawings is charged on total amount for an average period of 6 months.]

Transfer of Profit to Reserve

56. Sajal and Kajal are partners sharing profits and losses in the ratio of 2:1. On 1 st April, 2022, their Capitals
were: Sajal-T5,00,000 and Kajal-7 400,000.
Prepare ProDt & Loss Appropriation Account and the Partners' Capital Accounts for the year ended
31st March, 2023 from the following information:
(a) Interest on Capital is to be allowed @5% p.a.
(b) Interest on the loan advanced by Kajal for the complete year, the amount of loan being 3,00,000.
(o)Interest on partners'drawings @6% pa. Drawings: Sajal 1,00,000 and Kajal 80,000.
(d) 10% of the divisible profit is to be transferred to General Reserve.

Profit, before giving effect to the above, for the year ended 31st March, 2023 is 7,02,60o.
[Ans.: Closing Balances ofCapitalAVcs:Sajal--R 8,09,000; Kajal--7 5,31,10;
Share of Profit: Sajal-R 3,87,000; Kajal--R 1,93,500; General Reserve--T 64,500.J
Hint: Interest on loan by a partner is a charge
A l i and Bahadur are partners in a firm sharing profits and losses as Ali 70% and Bahadur 30%.Their respective
capitals as at 1st April, 2022 stand as Ali 2,50,000 and Bahadur R2,00,000.The partners are allowed interect
on capitals @ 5% p.a. Drawings of the partners during the year ended 3 Ist March, 2023 were 35,000 and

25,000 respectively.
Profit for the year, before allowing interest on capital and yearly salary of Bahadur @R 30,000, was T 4.00.000

Oo of divisible profit is to be transferred to Reserve

the above transactions,
Frepare Partners' Current Accounts and Capital Accounts recording
Bahadur-x 1,08,830; Amount transterred to Reserve-T347501
Ans.: Current Accounts:Ali- 1,96,420;
 Keeping-CBSE
XI
1.96 Double Entry Book
sharing profits
in the ratio of 5: 3 :2. Their
capitals as on 1st
canital

58. Kabir, Zoravar and

Parul are partners
3,20,000 and Parul- 2,00,000. Apei
Kabir-7 5,20,000, Zoravar
2022 were:

as follows:
Deed provided
The Partnership 24,000 p.a.
Zoravar each
will get salary of ?
(i) Kabir and of Net Sales.
commission of 2%
i) Parul will get 5% p.a.
to be allowed @
capital is
(Gii) Interest on
@ 5% p.a.
(iv) Interest on Drawings is to be charged Reserve.
transferred to General
Divisible Profit is to be
10% of
(v) 50,00,000. Drawings by each of ther
of the
Net Sales for the year ended 31st March, 2023
were
partnersduring
1,55,500.
Profit for the year was
the year was 60,000. Net
Account for the year
ended 31st March, 2023.
Prepare Profit & Loss Appropriation 40,000; Zoravar- 32,000; Parul_7 2o.
[Ans.: Share of Profit:Kabir-
meet the appropriations, it
is distributed in the
[Hints: 1. Since, net profit is not adequate to ratio of
1,10,000 or 5 :4:11.
appropriation to be made,i.e., T50,000:40,000:
will not be transferred to General Reservel
2. In the absence of divisible profit, amount
59. Xand Yentered into partnership on 1st April, 2018. Their capitals as on 1st April, 2022 were T 2,00,000and
1,50,000 respectively. On 1st October, 2022, X gave R 50,000 as loan to the firm. As per the provisionso

the Partnership Deed:

( 20% of Profits before charging Interest on Drawings but after making appropriations was to be
transferred to General Reserve.
ci) Interest on capital isto be allowed@ 12% p.a. and Interest on Drawings is to be charged@ 10%pa
(ii) Xto get monthly salary of 5,000 and Yto get salary of R 22,500 per quarter.
(iv) Xis entitled to a commission of 5% on sales. Sales for the year were 3,50,000.
()Profitto be shared in the ratio oftheir capitals up to 1,75,000 and balance equally.
Profitfor the year ended 31st March, 2023, before allowing or charging interest was T4,61,000.The drawing
of Xand Ywere 1,00,000 and 1,25,000 respectively.
Pass the necessary Journal entries relating to appropriation of profit. Prepare Profit & Loss Appropraton
Account and the Partners' Capital Accounts.
[Ans.: Interest on Capital: X-F 24,000; Y- 18,000;
Salary:X-760,000; Y-T
Commission: X-7 17,500; Interest on X-7 5,000,
Share of Profit: X- 1,18,125;
Drawings: Y-o
Y- 93,125; Capital Balance: X-R 5,140
Y-R2,19,875; Interest on Loan by X: 1,500; Transfer to General 50,0
Reserve
Adjustments for Incorrect Appropriations in the Past (Past
60. Reya, Mona and Nisha shared
profits in the ratio of 3: 2: 1. Profits for the last
Adjustments ere

1,40,000; 84,000 and 7 1,06,000 respectively. These three ye The

error is now to be profits were by mistake distributed eu
corrected.
Give the necessary
rectification Journal entry.
[Ans.: Debit Nisha's Capital A/c and T550

61. Azad and Credit Reya's Capital AC y

Benny equal partners. Their
are e accounts

for the year had been capitals areT 40,000 and 80,000
prepared, it was noticed that
interest @ 5% p.a. as
respectively. ArtetnershipDeed
was not credited to
their Capital Accounts
before provided in the raadiusme
entry in the beginning of the next year. Record the distribution of profits. It is decided to pas>s an a
necessary Journal entry.
62. Ram, Mohan and
Ans.: Debit Azad by 1,000 and CreditBenny by h
Sohan sharing F 6 0 0

profits and losses equally have and

respectively. For the year ended 31st March, 2023, interest was capitals of 00,7 90,000
1,20,000, of5% pa instead

Pass the credited to them % p.a.

adjustment Journal entry. @6% P.a:" Sohanby
730

Ans.: Debit Ram and Credit

edit Soh
 Chapter 1 Accounting for Partnership Firms-Fundamentals 1.97

am.Shyam and Mohan were partners in a firm sharing profits and losses in the ratio of
2:1:2.onTheir
Mwere fixed at 3,00,000, 1,00,000, F 2,00,O00. For the year ended 31st March, 2023, interest capitals
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 and pass the necessary adjustment entry.
Ans.: Debit Shyam's Current A/c by7 200 and Mohan's Current A/c by 400;
Credit Rarm's Current A/c by 600.]J
64. Profitearned by a partnership firm for the year ended 31st March, 2023 were distributed equally between the
partners-Pankaj and Anu--without charging interest on Drawings. Interest due on Drawings was Pankaj
3,000 and Anu- 1,000.
Pass necessary adjustment entry. [Ans.: Debit Pankaj's Capital A/c and Credit Anu's Capital Alc by7 1,000.]
65. Ram, Mohan and Sohan were partners sharing profits in the ratio of 2:1:1. Ram withdrew 3,000 everyy
month and Mohan withdrew 4,000 every month. Interest on drawings @ 6% pa. was charged, whereas
the partnership deed was silent about interest on drawings.
Showing your working clearly, pass the necessary adjustment entry to rectify the error. (CBSE 2020)
[Ans.: Dr. Ram's CapitalA/c by 180 and Sohans CapitalA/cby 630; Cr. Mohan's Capital A/cby 810]
66. Simratand Birare partners in a fim sharing profits and losses in the ratio of 3:2.On 31st March, 2023 after
closing the books of account, their Capital Accounts stood at 4,80,000 and T 6,00,000 respectively. On
1st May, 2022, Simrat had introduced an additional capital of 1,20,000 and Birwithdrew 60,000 from his
capital. On 1st October, 2022, Simrat withdrew 2,40,000 from her capital and Bir introduced 3,00,000.
Interest on capital is allowed at 6% p.a. Subsequently, it was noticed that interest on capital @ 6% pa.
had been omitted. Profit for the year ended 31st March, 2023 amounted to 2,40,000 and the partners
drawings had been: Simrat- 1,20,000 and Bir- 60,000.
Compute the interest on capital if the capitals are (a) fixed, and (b) fluctuating.
on Capital: (a) Simrat-{ 35,400; Bir- 27,300; (b) Simrat- 33,960;
Bir- 25,140.]
[Ans:Interest
firm in the ratio of 2: 3. Their Capital Accounts as on
sharing profits
67. Mita and Usha are partners in a
Usha
1st April, 2015 showed balances of F 1,40,000 and 7 1,20,000 respectively. The drawings of Mita and
and 24,000 respectively. Both the amounts were withdrawn on
during the year 2015-16 were 32,000
that the following items had been omitted while preparing
1st January, 2016. It was subsequently found
2016:
the final accounts for the year ended 31st March,
(a) interest on Capital@ 6% p.a.
(b) Interest on Drawings @ 6% p.a.

Mita was entitled to a commission of 8,000 for the whole year.

in the books of the firm. (Al 2017 C
Showing yourworking clearly, pass a rectifying entry and Credit Mita's Capital A/c byT 6,816.]
[Ans.: Debit Usha's Capital A/c
were R 60,000, R 40,000
and 20,000 respectively. Their profit-
b8. A,Band Cwere partners. Their fixed capitals entitled to interest on capital @ 5% p.a.
the Partnership Deed, they were
sharing ratio was 2:2:1. According to month. C was entitled to a commission of
ofR 1,500 per
In addition, B also entitled to draw a salary
was the salary payable to B. The
S% on the profits after charging the
interest on capital, but before charging
distributed in the ratio oftheir capitals
without providing for any of
net profits for the year, 80,000, were
the necessary adjustment entry. (CBSE 2019)
the above adjustments. Showing your
workings clearly, pass
A/c by R 14,253 and Cs Curent A/c by R 1,8271
16,080; Cr. B's Current
LAns.: Dr. As Current A/c by on Capital)] R 3,700.] =

7 74,000 [i.e., 7 80,000-76,000 (lnterest

5/100 x
Hint: C's Commission =

profits in the ratio of 3:2:1.Theircapitals

were 5,00,00o,
69. partners sharing to the partnership deed, they were
*
Pranav, Karan and Rahim were
as on 1st April, 2022. According
5,00,000 and 2,00,000 respectively 31st March, 2022, profit of
78,000 was
the year ended
at 10% p.a. For
citled to an interest on capitalwithout providing for interest on capitals.
riDuted among the partners show the working cleariy.
rass the necessary adjusting entry
and
Capital A/c and Cr.
Rahim's Capital A/cbyT2,600.]
[Ans.: Dr. Karan's insufficient amount.]
capital due to
in the ratio ofinterest
on
EPront will be distributed
 1.98 Double Entry Book Keeping-CBSE XI
70. On 31st March, 2023, after the closing of the accounts, Capital Accounts of P,
P, Q
Q and
and RR stod
stood in the
30,000 and 20,000 respectively. Subsequently, was that noticed bou.
ofthe firm at 40,000; omitted. Profit for the year ended 31st March, 2023 was 60.000 ans interest o
capital @ 5% had been
drawings had been P-F 10,000, Q-R 7,500
and R-R 4,500. Profit-sharing ratio of P. O andn partnere
Pass necessary adjustment entry.
[Ans.: Debit P's Capital A/c by 300; Credit Q's CapitalA/cby T83aand R's Capital
A/c by
Hint: Opening Capital: P{ 20,000; Q-7 17,500; R- 14,500.] 292
71. Mohan, Vijay and Anil are partners, the balances of their Capital Accounts being 30,000, 3 2%o.
20,000 respectively. In arriving at these amounts profht for the year ended 31st March, 2023, 7 24
been creditedto partners in their profit-sharing ratio. Their drawings were 5,000 (Mohan), 4
and 3,000 (Anil) during the year. Subsequently, following omissions were noticed and 0 (Vijay)
it was decida
rectify the errors: ed to
(a) Interest on capital@ 10% p.a.
(b) Interest on drawings: Mohan 250, Vijay200 and Anil 150.
Make necessary corrections
through Journal
a
entry and show your workings clearly.
[Ans.: Debit Anil by 550 and Credit Mohan
72.
by 550; Corrected Profit transferred to each partner6,1001
Mudit, Sudhir and Uday are partners in a firm
sharing profits in the ratio
of 3:1:1.Their fixed capital balances
are 4,00,000, F 1,60,000 and 1,20,000
distributed amongst the partners was respectively. Net profit for the year ended 31st March, 2018
1,00,000, without taking into account the
(a) Interest capitals @ 2.5% p.a.
on following adjustments
(b)Salary to Mudit 7 18,000 p.a. and commission
(c)Mudit was allowed a commission of 6% of
to Uday 12,000.
divisible profit after
Pass a rectifying Journal
entry in the books of the firm. Show
charging such commission.
[Ans.: Dr. Sudhir's Current A/c by
R6,000; Cr. Mudit's Current A/c workings clearly. (CBSE Sample Paper 2019
by 7 1,000 and Uday's Current A/c by 5,000,
73. Piya and Bina are
partners in a firm sharing profits and losses in the
Sheet of the firm as on 31st ratio of 3 2.
March, 2016: Following was the Balance
Liabilities
Assets
Capital A/cs:
Piya Sundry Assets
Bina 80,000 1,20,000
40,000 1,20,000
1,20,000
1,20,000
The
profits30,000 for the ended 31st March,
allowing interest capital @year
on
12% p.a. and
2016 were divided
between the partners wi hout
withdrew 8,000 and Bina withdrew salary to Piya @ 1,000 per month.
During
rectifying entry. 4,000. Showing your working notes
the year,
clearly, pass the
17
74. Naveen, Qadir and [Ans.:Debit Bina's Capital A/c
accounts of Rajesh were
partners doing an electronic
and Credit Piya's
Capital A/c by t >,0856the
partnership
allowed to partners @ 6% were drawn
up and closed, it goods business in
for interest on p.a.for the years ending 31st was
discovered that interestUttarakhana. hen
capital
salary of 3,500 and R
in the March,
Partnership Deed. On the other 2017 and 2018,
on
capita ion
4,000 per quarter
although
hand, Naveen and Qadir
there is no
d to a
fixed capitals were
shared the profits and4,00,000, 3,60,000 and
respectively, which has not been were n Their
taken into
losses as follows: 2,40,000 respectively. considerdu
During the last twO yeat
had

Year Ended
31st March, 2017
31st March, 2018 Ratio
Pass necessary adjusting entry for 3:2:1
your workings clearly. the above 5:3:2
[Ans.:Dr. Rajesh's
adjustments in the books
of the firm on 1st
Dril, 2 0 1 8 . Show

Current AVc by 17,800; Cr. Naveen's Ap CeSE 201

Current A/c by 10,000 and Qadir's Curent 7800)

r
 1.99
Chapter 1 Accounting for Partnership Firms-Fundamentals
Mannu and Shristhi are partners in a firm sharing profits in the ratio of 3:2. Following information is of the
75. 31st March, 2023:
firm as on

Liabilities
Assets

Mannu's Capital 3,00,000 Drawings

1,00,000 4,00,000 Mannu 40,000
Shristhi's Capital 60,000
Shristhi 20,000
3,40,000
Other Assets
4,00,000
4,00,000

ratio, but
the year March, 2023 was
ended 31st 50,000 which was divided in the agreed
Profit for omitted. Adjust interest on
interest@ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently (NCERT, Modified)
drawings on an average basis for 6 months. Give the adjustment entry. 2,880.]
[Ans.: Debit Shristhi and Credit Mannu by
after making
the balances in the Capital Accounts of Abhir, Bobby and Vineet,
76. On 31st March, 2018,
and T4,00,000 respectively.
adjustments for profits and drawings were 8,00,000, F 6,00,000 The
interest on drawings had been omitted.
Subsequently, it was discovered that interest on capital and @ 6%
to interest on 10%
capital@ and were to be charged interest on drawings p.a.
partners were entitled p.a.
drawn at the end of each month, Bobby-50,000
The drawings during the year were: Abhir- 20,000
withdrawn on 31st October, 2017. The
drawn at the beginning of every half year and Vineet- 1,00,000
2:2:1.
net profit for the year ended 31st March, 2018 was 1,50,000. The profit-sharing ratio was
show your
Pass necessary adjusting entry for the above adjustments in the books of the firm. Also,
(CBSE 2019)
workings clearly.
[Ans.: Dr. Bobby's Capital A/c by 14,402; Cr. Abhir's Capital A/c by 10,112 and Vineet's Capital A/cby 4,290.]
Accounts of Saroj, Mahinder and Umar after making
77. On 31st March, 2014, the balances in the Capital
? 60,000 and ? 40,000 respectively. Subsequently,
adjustments for profits and drawings, etc., were 80,000,
it was discovered that the interest on capital
and drawings has been omitted.
2014 was? 80,000.
(a) The profit for the year ended 31st March, end
each withdrew a sum of ? 24,000 in equal instalments in the
(6) During the year Saroj and Mahinder
ofeach month and Umar withdrew 36,000
drawings was to be charged @ 5% pa. and interest on capital was to be alowed @ 10% p.a.
c)The interest on
:3:1.
(d) The profit-sharing ratio among partners was 4 (Delhi 2015 )
Showing your workings clearly, pass the necessary rectifying entry.

Ans.: Dr. Saroj's Capital A/c by 2,350 and Mahinders Capital A/c by 1,300;
Cr. Umar's Capital A/c by 3,650.]
March, 2023 were 790,000, 7 3,30,000 and 6,60,000
78. Capitals of Kajal, Neerav and Alisha as on 31st distributed in the ratio of
the year ended 31st March, 2023 was
respectively. Profit of 1,80,000 for the year, each partner withdrew 3,60,000.
4:1:1 after allowing Interest on Capital@ 10% p.a. During
ratio but provided for interest on capital @ 12% p.a.
he Partnership Deed was silent as to profit-sharing

Fass the necessary adjustment entry showing

the working clearly.
and Credit Neerav by 30,000 and Alisha by 36,000.]
[Ans.:Debit Kajal by T 66,000
Ouarantee of Minimum Profit to a Partne
2. Rohit admitted for 1/6th share of
79 o h i t and Sobhit
M are sharing profits in the
partners of 3 : ratio was

10,000. At the close of the first inancial year, the firm earned
pront with a minimum guaranteed profit of T
pront of R 54,000. Find the share of proft which
Mohit, Sobhit and Rohit will get.
Rohit's Share-
Sobhit's Share- 17,600; 10,0001
[Ans.: Mohit's Share-{ 26,400;
and losses in the ratio of 4:2:1. It was provided that
D à n d C were in partnership sharing profits 31st March, 2023 is
than R 75,000. Profit for the year ended
C's in profit for a year would not be less
snare the partners. Profit & Loss Appropriation
show the appropriation among
to
,000. You are required
Account is not required. A-7 1,60,000; B-F 80,000; C- 75,000.]
[Ans.: Share of Profit:
 1.100 Double Entry Book Keeping-CBSE XlI

81. X,Yand Zentered into partnership on 1st October, 2022 to share profits in the ratio of 4 3.-
guaranteed that Z's share of profit after allowing interest on capital@ 10% p.a. would.
T80,000 ina year. Capital contributions were: X-R 3,00,000, Y-7 2,00,000 and Z_1SDe less
3:3.X,perso
Profit for the year ended 31st March, 2023 was 1,60,000. Prepare Profit & Loss
han
Appropriation.
[Ans.: Net Profit- 1,27,500; Share of Profit:X-
Y 1,27,500 x 3/10 =7 38,250;
38,250+7 o00-1,750 =R4
[Hint: Guaranteed amount for half-year =T 80,000 x 1/2 F 40,000.] = 1,750=R4
82. A, Band Care partners sharing profits in the ratio of 5:4:1.C is
given guarantee that his min
of profit in any year would be at least
50,000. Deficiency, if any, would be borne by A and B
for the year ended 31st March, 2023 was eqal
4,00,000. ally. Proht
Pass necessary Journal entries in the books of the firm.

Ans.: Deficiency of C-R 10,000 borne by A and B

83. Atul, Bipul and Charu are partners sharing equally, i.e., T 5.00e
profits equally. Bipul is ach
T 2,00,000 per annum. guaranteed minimum proft
Salary is payable to Bipul of 10,000 per month. Net Profit for
31st March, 2023 the year en
is 6,60,000. nded
Prepare Profit & Loss Appropriation Account for the
year.
[Ans.: Share of Profit: Atul- 1,70,000;
84. Parul, Prerna and Kaushal are Bipul-R 2,00,000 and Charu- 1,70,0
partners sharing profits equally. Parul is guaranteed minimum
T 2,00,000. Kaushal is to
get Commission @5% of Net Sales and the commission is annual profto
Net Profit for the year ended 31st determined at 7 50,00
March, 2023 is 2,50,000.
Prepare Profit & Loss Appropriation Account for the
year
[Ans.: Share
of Profit: Parul- 2,00,000; Prerna-Nil and Kaushal-N
85. Nimrat, Maira and Kabir are partners
sharing profits in the ratio of 2:2:1. Nimrat
profit of 1,60,000 per annum. Net Profit for the is guaranteed minimun
year ended 31st March, 2023 is
Prepare Profit & Loss Appropriation Account for the 1,00,000.
yea.
[Ans.: Nimrat will get 7 1,60,000
(Guaranteed Profit); Loss ofT 600
will be shared
86. Ashmit, Abbas and Karman are by Maira and Kabir in 2:1 ata
partners
profit of 1,50,000 per annum. The firmsharing profits in the ratio of 3 :2:1. Abbas is
incurred loss for the guaranteed minirimum
Prepare Profit & Loss Appropriation Account for year ended 31st March, 2023 of
the year.
t sU
[Ans.: Abbas will get guaranteed amount of R 1,50,000; Total Loss ofT 1804
ratiel
87. will be shared by Ashmit and Karman in 3:
P,Q and R entered into
partnership on 1st April, 2018 to share profits and losses
was
provided that in no case R's share in in the rati0
ocfo
the year ended 31st March, were: 2021 profit would be less tharn 30,000
Profit
1,20,000; 2022 Profit
p.a. The prohts a
Pass the 1,80,000; 2023 LoSS <4
necessary Journal entries in the books of
the firm.
March 2
[Ans.: For 31st
Dr. P's Capital A/c by 3,600 and Q's Deficiency-yearended
Capital A/c Capital Ac by
by 2,400;
Cr. Rs C 023
For ended31stMarch,
Dr. P's
Capital A/c by 32,400 and
Q's
Deficiency-yed 544
88. Pand Q were Capital A/c by7 21,600; Cr. R's CapitalAlcbyf
new partner forpartners in a firm
1/8th share in thesharing
profitsprofits
with ainguaranteed
the ratio ofprofit
5 :3. of T75,000. The new P dmitted Capita
quaraniHs
On 1st April, 2022
between P and Q will remain
the same but
tnhcharing
R in the ratio of they agreed to bear any
3:2. The profit of the firm for deficiency on a
the year ended 31st March,
Prepare Profit & Loss 2023 was 9 000.
Appropriation Account of P, Q and R for the h
Modifed 2023.

year ended 31st

Marahi
(Delh 2016
[Ans.: Deficiency of
Profit 25,000 will be borne by P and
Share of Profit: P
2,03,750; Q-
50:R
1,2140
 Chapter 1 Accounting for Partnership Firms-Fundamentals 1.101

A a n d Bare in partnership sharing profits and of 3:2. They admit C, their Manager, as a
losses in the ratio

partner
witheffect from 1st April, 2022, for 1/4th share of profits.
Manager, was in receipt of a salary
of T 27,000 p.a. and a commission of 10% of net profit after
Cwhile a
and commission.
charging such salary
over
In terms of the
Partnership Deed, any excess amount, which C will be entitled to receive as a partner
for
the amount which
would have been due to him if he continued to be the Manager, will be borne by A. Profit
31st March, 2023 amounted to R 2,25,000.
the year ended
Prepare Profit
& Loss Appropriation Account for the year ended 31st March, 2023.
[Ans.: Share of Profit:A-T 96,750; B-72,000; C-R 56,250.]
Accounts stood at 6,00,000; 5,00,000
90. Asgar,
Chaman and Dholu are partners in a
firm. Their Capital
Profits and Losses in the proportion of
and 4,00,000 respectively on 1st April, 2022. They shared
Chaman and Dholu
interest on capital @ 8% per annum and salary to
4:2:3. Partners are entitled to Deed.
month and R 10,000 per quarter respectively as per the provision of the Partnership
@ 7,000 per of
but including salary) is guaranteed at a minimum
Dholu's share of profit (excluding interest on capital ended
shall be met by Asgar. The profit for the year
71,10,000 p.a. Any deficiency arising on that account
31stMarch, 2023 amounted to { 4,24,000.
(Delhi 2013, Modified)
Account for the year ended 31st March, 2023.
Prepare Profit & Loss Appropriation and Dholu-{ 70,000.]
[Ans.: Share of Profit: Asgar- 70,000; Chaman- 40,000
is recovered from Asgar.]
[Hint: Deficiency of ? 10,000 in Dholu's share
distributed the profits for the year ended 31st March, 2017,
91. The partners ofa firm, Alia, Bhanu and Chand
for the following adjustments:
80,000 in the ratio of 3:3: 2 without providing
of ? 1,500 each per month.
(a) Alia and Chand were entitled to a salary
(b) Bhanu was entitled for a c o m m i s s i o n of
4,000.
be borne
(c) Bhanu and Chand had guaranteed
a minimum profit of ? 35,000 p.a. to Alia, any deficiency to
equally by Bhanu and Chand.
above adjustments in the books of the
firm. Show workings clearly.
Pass the necessary Journal entry for the (CBSE Sample Paper 2018)

and Chand's Capital A/c by 2,000; Cr. Alia's Capital A/cby

23,000.]
Ans.: Dr. Bhanu's Capital A/c by 21,000
in the ratio of3:3:2. The Partnership Deed provided
92. Ajay, Chetan were partners sharing profits
Binay and
for the following:
to Ajay and Binay.
() Salary of R 2,000 per quarter
commission of 8,000.
(in) Chetan was entitled to a

profit of 50,000 p.a.

(in) Binay was guaranteed a
which was distributed among Ajay,
year ended 31st
March, 2015 was 1,50,000
ofthe
The profit firm for the consideration the provisions Partnership of
Chetan in the ratio 2:1, without taking into
of 2:
Binay and for the above adjustments
in the books of the firm. Show your
Deed. Pass necessary rectifying entry (Delhi 2016 o
workings clearly. 2,000; Cr. Chetans Capital Acby8,400
Ans.: Dr. Ajay's Capital A/c by T 6,400
and Binay's Capital Ac by Accounts
On 1st April, 2022, the balances in their Capital
Ankur, Bhavna and Disha partners in a firm.
are
shared profits in the proportion of
4,00,000 respectively. They
Stood at 14,00,000, 7 6,00,000 and and salary to Bhavna
Partners entitled to interest
are
@ 6%
capital on annum per
:3:2 respectively. month to Disha as per the provisions Partnership Deed.
of the
S , 0 0 0 p.a. and a commission of T
3,000 per
than 1,70,000 p.a. Disha's
interest on capital)
is guaranteed at not less
Dnavna's share of profit
(excluding
but excluding commission)
is guaranteed at not less than
of profit (including interest on capital firm for the
nare on that
account shall be met by
Ankur. The profit ofthe
,50,000 p.a. Any deficiency arising
to 9,50,000.
year ended 31st March, 2023 amounted 31st March, 2023. (AI 2013, Modified)
for the year ended
Prep a r e 'Profit & Loss Appropriation Account' D i s h a - 1,26,000.]
i,80,000 and
4, 14,000; Bhavna-
[Ans.: Share of Profit:Ankur-
Hint: Deficiency of 6,000 is contributed
by Ankur for Disha.
1.102 Double Entry Book Keeping-CBSE XII

Minimum Earnings Guranteed by a Partner

94. Three Chartered Accountants Abhijit, Baljit and Charanjit forma partnership, profits being sharedinththe
ratio of 3:2:1 subject to thefollowing:
(a) Charanjit's share of profit guaranteed to be not less than 15,000 p.a.
(b) Baljit gives a guarantee to the effect that gross fee earned by him for the hrm shall be equal to hic
average gross fee of the preceding five years when he was carrying on protession alone, which on ann
average works out at? 25,000.
The profit for the first year by Baljit for the firm is 16,000
of the partnership is 75,000. The gross fee earned
You are required to show Profit & Loss Appropriation Account after giving effect to the above.
(NCERT, Modifed
[Ans.: Abhijit's Share41,400; Baljit's Share- 18,600; Charanjit's Share- 15,000
[Hint: The Gross fee of 16,000 earned by Baljit for the firm is less than the amount
guaranteed by him.
So the deficiency of R 9,000 (i.e., F 25,000 16,000) will be debited to
Baljit's Capital Account and
credited to Profit & Loss Appropriation Account.]
95. Xen, Sam and Tim are partners in a firm. For the year ended 31st March, 2022, the
was distributed
profit of the firm 1,200,000
equally among them, without giving effect to the following terms of the partnership Deed:
(i) Sam's guarantee to the firm that the firm would earn a profit
profits would met by him.
of at least 1,35,000. Any shortfall in these
(i) Profits to be shared in the ratio of 2: 2:1.
You are required to pass the necessary Journal entries to rectify the error in accounting.
[Ans.:(i) Profit wrongly distributed now reversed: Dr. Xen's
Sam's Capital A/c by 40,000 and Tim's
Capital A/c by 40,000;
Cr. Profit & Loss
Capital A/c by 40,000
) For Shortfall in Profit: Dr. Sam's Capital A/c and Cr. Profit & Adjustment A/c by 1,20,000.
Loss Adjustment A/c
Cil) For Rectified Profit Distributed (2:2: 1): Dr. by 15,000.
Profit
Cr. Xen's Capital by 54,000, Sam's Capital A/c by R 54,000 and
& Loss Adjustment
A/c by 1,35,000.
Tim's Capital A/c by 27,000.]

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