Partnership Deed

1. In the absence of Partnership Deed, state the provisions of the Partnership Act, 1932
relating to:
(a) Salaries of partners, (b) Interest on partners'capitals,
(c) Interest on loan by partner, (d) Division of profit,
(e) Interest on partners'drawings, (f) Interest on Loan given to partners?
[Arts.: (a) Not allowed; (b) Not allowed; (c)6%p.a.; (d) Equal; (e) Not charged; (f) Not
charged.]
2. Mahesh, Ramesh and Suresh are partners in a firm. They do not have a Partnership Deed.
At the end of the first 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
Suresh do not agree.
(b) Ramesh wants that the partners should be allowed to draw salary but Mahesh and Suresh
do not agree.
(c) Mahesh and Ramesh want that Suresh should pay interest on loan given to him by the firm
but Suresh does not agree.
(d) Mahesh and Ramesh having contributed larger amounts of capital, desire that the profits
should be distributed in the ratio of their capital contribution but Suresh does not 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 Ramesh's claim is not accepted; Suresh will not pay interest in the absence of
agreement, and (d) Profits or losses would be distributed among the partners equally.
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) P used ₹ 50,000 belonging to the firm and earned a profit of ₹ 5,000. Q and R want the
amount to be given to the firm.
(b) Q used ₹ 10,000 belonging to the firm and incurred a loss of₹ 1,000. He wants the firm to
bear the loss.
(c) P and Q 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) R had given loan of₹ 2,00,000 to the firm and demands interest @ 10% p.a. P and Q do
not want to pay the interest.
[Ans.: (a) P must pay—₹ 55,000; (b) Q must pay— ₹ 10,000; (c) Goods may be bought from
Star Ltd.; (d) W cannot be admitted; (e) R will get interest @ 6% p.a.]
4. Barun, Tarun and Shivam are partners in a firm and do not have a Partnership Deed. Barun
introduced further capital of₹ 5,00,000 on 1st October, 2022. Whereas Shivam took loan of ₹
50,000 from the firm on 1 st October, 2022. Disputes have arisen among them on the following:
(a) Barun demands interest @ 10% p.a. on ₹ 5,00,000 being his extra capital.
(b) Tarun desires that his son Deep should be admitted as partner and he will give him half of
his share. Barun and Shivam do not agree.
(c) Barun and Tarun are of the view that Shivam should be charged interest on loan from the
firm at the lending rate of the banks, which is 12% p.a.
(d) Tanun has withdrawn ₹ 50,000 from the firm for his personal use. Barun and Shivam are
of the view that Tarun should be charged interest @ 10% p.a.
Give solution to each issue of dispute.
[Ans.: In the absence of Partnership Deed, the provisions of Indian Partnership Act, 1932 will
apply: (a) Interest will not be paid on extra capital introduced, (b) Deep cannot be admitted
as Barun and Shivam don't agree, (c) No interest will be charged from Shivam as rate of
interest was not agreed, (d) Interest on drawings will not be charged from Tarun.)
5. Harshad and Dhiman are in partnership since 1 st April, 2022. No partnership agreement
was made. They contributed ₹ 4,00,000 and ₹ 1,00,000 respectively as capitals. In addition,
Harshad had given loan of ₹ 1,00,000 to the firm on 1st October, 2022. Due to long illness,
Harshad could not participate in business activities from 1st August, 2022 to 30th September,
2022. Profit for the year ended 31st March, 2023 was ₹ 1,80,000. Dispute has arisen between
Harshad and Dhiman.
Harshad Claims:
(i) He should be given interest @ 10% per annum on capital and loan;
(ii) Profit should be distributed in the ratio of capital.
Dhiman Claims:
(i) Profits should be distributed equally;
(ii) He should be allowed ₹ 2,000 p.m. as remuneration for the period he managed the
business in the absence of Harshad;
(iii) Interest on Capital and loan should be allowed @ 6% p.a.
You are required to settle the dispute between Harshad and Dhiman. Also prepare Profit &
Loss Appropriation Account. (NCERT, Modified)
[Ans.: Harshad and Dhiman each gets ₹ 88,500 as profit and Harshad gets ₹ 3,000 as
Interest on Loan.]
[Hints: Harshad's Claim: (a) Harshad is not entitled to any interest on capital, but he is entitled
to interest on his loan @ 6% p.a.;
(b) Profits will be distributed equally as per Partnership Act, 1932.
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
6. X and Y are partners sharing profits and losses in the ratio of 2 : 3 with capitals of ₹ 2,00,000
and ₹ 3,00,000 respectively. On 1 st October, 2022, Xand Y gave loans of₹ 80,000 and ₹
40,000 respectively to the firm. Show distribution of profits/losses for the year ended 31st
March, 2023 in each of the following alternative cases:
Case 1. If the profit before interest for the year amounted to₹ 21,000.
Case 2. If the profit before interest for the year amounted to ₹ 3,000.
Case 3. If the profit before interest for the year amounted to ₹ 5,000.
Case 4. If the loss before interest for the year amounted to ₹ 1,400.
[Ans.: Interest on Loan by X ₹ 2,400; Interest on Loan by Y ₹ 1,200;
Case 1. Profit: X ₹ 6,960; Y ₹ 10,440; Case 2. Loss: X ₹240; Y ₹ 360;
 Case 3. Profit: X ₹ 560; Y ₹ 840; Case 4. Loss: X ₹ 2,000; Y ₹ 3,000.]
[Hint: Interest on Loan by partner is a charge against profit.]
7. Sita and Geeta are partners in a firm sharing profits in the ratio of 3 :2. They had given
loan to the firm of ₹ 30,000 in their profit-sharing ratio on 1 st October, 2022.The
Partnership Deed is silent on interest on loans from partners. Compute interest payable
by the firm to the partners, assuming the firm closes its books every year on 31st March.
[Ans.: Interest payable to Sita—₹ 30,000 x 3/5 x 6/100 x 6/12 = ₹ 540;
Interest payable to Geeta—₹ 30,000 x 2/5 x 6/100 x 6/12 = ₹ 360.]
[Hint: According to the Indian Partnership Act, 1932, interest @6% p.a. is payable on the
amount of loan given by partners. In the present case, interest will be payable for 6 months,
i.e., from 1 st October, 2022 to 31st March, 2023.]
8. Bat and Ball are partners sharing the profits in the ratio of 2 : 3 with capitals of ₹
1,20,000 and ₹ 60,000 respectively. On 1st October, 2022, Bat and Ball gave loans of ₹
2,40,000 and ₹ 1,20,000 respectively to the firm. Bat had allowed the firm to use his
property for business for a monthly rent of ₹ 5,000. Loss for the year ended 31st March,
2023 before rent and interest amounted to ₹ 9,000. Show distribution of profit/loss.
[Ans.: Share of Loss: Bat—₹ 31,920; Ball—₹ 47,880.]
[Hint: Interest on Loan by partner and Rent are charges against profit.]
9. Akhil, Sunil and Parvesh are partners sharing profits in the ratio of 3 : 2 :1. Sunil had
given loan to firm on 1st November, 2022 of₹ 4,00,000. Interest payable was agreed @
12% p.a. Interest was paid by cheque up to February, 2023 on 1 st March, 2023 and
balance was yet to be paid.
Pass the Journal entries for interest on loan by partner.
[Ans.: Interest on Loan by Sunil up to February, 2023—₹ 76,000;
Interest transferred to Profit & Loss A/c—₹ 20,000.]
Interest on Loan to the Firm by Partner and Loan by the Firm to Partner
10. Akhil and Bimal are partners sharing profits in the ratio of 3 : 2. Akhil gave loan to
the firm of ₹ 1,00,000 on 1st October, 2022. On the same date, the firm gave loan to
Bimal of ₹ 1,00,000. They do not have an agreement as to interest.
Akhil had also given his personal property for firm's godown at a monthly rent of ₹
5,000.
Firm earns profit of ₹ 1,03,000 (before above adjustments) for the year ended 31st
March, 2023. Show the distribution of profit for the year.
[Ans.: ₹ 40,000 [(₹ 1,03,000 - ₹ 3,000) (interest on Loan by Akhil)—₹ 60,000 (rent)] will be
distributed in the ratio of 3:2. Akhil—₹ 24,000; Bimal—₹ 76,000.]
[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 firm had given
loan to Pawan of ₹ 5,00,000 on 1 st April, 2022. Interest was to be charged @ 10% p.a.
The firm took loan of ₹ 2,00,000 from Nirmal on 1st October, 2022. Before giving effect
to the above, the firm incurred a loss of ₹ 10,000 for the year ended 31 st March, 2023.
Determine the amount to be transferred to Profit & Loss Appropriation Account.
[Ans.: Amount of Profit transferred to Profit & Loss Appropriation A/c—₹ 34,000.]
12. Ankit, Bhanu and Charu are partners in a firm sharing profits and losses equally with capital
of ₹ 2,50,000 each. On 1 st October, 2022, Ankit and Bhanu gave loans of ₹ 2,50,000 each to
the firm whereas Charu took a loan of₹ 1,00,000 from the firm on the same date. It was agreed
among the partners that Charu will be charged Interest @ 6% p.a. interest on loan from
partners was paid on 10th April, 2023. The firm closes its books on 31st March each year.
Pass the Journal entries in the books of the firm for the year ended 31st March, 2023.
[Ans.: Interest credited to Loan Accounts of Ankit and Bhanu—₹ 7,500 each; interest debited
to Charu's Capital Account—₹ 3,000.]
13. Atul, Jetha and Tarak are partners sharing profits equally. Jetha was given loan by
the firm on 1st July, 2022 of ₹ 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 will be passed;
(b) Interest on Loan to Jetha (up to 31st March, 2023)—₹ 45,000.]
14. Parul, Paresh and Rahul are partners in a firm. Firm gave loan to Rahul on 1st February,
2023 of ₹ 6,00,000. Interest was agreed to be charged @ 6% p.a. Interest was paid by cheque
up to February, 2023 by Rahul on 5th March, 2023 and balance was yet to be paid by him.
Pass the Journal entries for interest on loan to partner.
[Ans.: Interest on Loan to Rahul (for February, 2023)—₹ 3,000; Interest transferred to
Profit & Loss A/c (up to 31st March, 2023)—₹ 6,000.]
Profit & Loss Appropriation Account
15. Vinod and Mohan are partners. Vinod's Capital is ₹ 1,00,000 and Mohan's Capital is ₹
60,000. Interest on
capital is payable @ 6% p.a. Vinod is to get salary of₹ 3,000 per month. Net Profit for the year
is ₹ 80,000. Prepare Profit & Loss Appropriation Account.
[Ans.: Share of Profit: Vinod—₹ 17,200; Mohan—₹ 17,200.]
16. X, Y and Z are partners in a firm sharing profits in the ratio of 2 : 2 :1. Fixed capitals of the
partners were: X ₹ 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 was ₹ 4,00,000.
Prepare Profit & Loss Appropriation Account.
[Ans.: Divisible Profit—₹ 2,75,000.]
17. X and Tare 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, 2023
before interest on capital but after charging Y’s salary was ₹ 2,40,000.
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 allocation of profits.
[Ans.: Provision for Manager's Commission—₹ 15,000 (i.e., 5% of ₹ 3,00,000), Share of
Profit: X—₹ 93,000; Y—₹ 62,000.]
18. Atul and Mithun are partners sharing profits in the ratio of 3 : 2.
Balances as on 1 st April, 2022 were as follows:
Capital Accounts (Fixed): Atul—₹ 5,00,000 and Mithun—₹ 6,00,000.
Loan Accounts: Atul—₹ 3,00,000 (Cr.) and Mithun—₹ 2,00,000 (Dr.)
It was 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 ₹ 5,000 each.
Profit before giving effect to above was ₹ 2,28,000 for the year ended 31 st March, 2023.
Prepare Profit & Loss Appropriation Account.
[Ans.: Share of Profit: Atul—₹ 72,000; and Mithun—₹ 48,000.]
19. Reema and Seema are partners sharing profits equally. The Partnership Deed provides
that both Reema and Seema will get monthly salary of₹ 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 ₹ 5,00,000 each and drawings during the year were ₹ 60,000 each.
The firm incurred net loss of ₹ 1,00,000 during the year ended 31st March, 2023.
Prepare Profit & Loss Appropriation Account for the year ended 31st March, 2023.
[Ans.: Loss—₹ 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 ₹ 8,00,000 and ₹ 10,00,000 respectively. Their drawings during the year were ₹
50,000 and ₹ 1,00,000 respectively. Interest on Capital is a charge and is to be allowed @
10% p.a. and interest on drawings is to 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.
[Ans.: Loss—₹ 48,750; Dr. Bhanu's Current A/c and Partap’s Current Account by ₹ 24,375
each.]
PARTNERS' CAPHAL ACCOUNTS
Fixed Capital
21. Amit and Sumitentered into partnership on 1st April, 2022and invested₹
1,50,000and₹2,50,000 respectively as capitals. The Partnership Deed provided for interest on
capitals @ 10% p.a. It also provided that Capital Accounts shall be maintained following Fixed
Capital Accounts Method. The firm earned net profit of ₹ 1,00,000 for the year ended 31st
March, 2023.
Pass the Journal entry for interest on capital.
[Ans.: Dr. Profit & Loss Appropriation A/c by ₹ 40,000; Cr. Amit's Current A/c by ₹ 15,000
and Sumit's Current A/c by ₹ 25,000.]
22. Kamal and Kapil are partners having fixed capitals of ₹ 5,00,000 each as on 31st March,
2022. Kamal introduced further captial of ₹ 1,00,000 on 1st October, 2022 whereas Kapil
withdrew ₹ 1,00,000 on 1 st October, 2022 out of capital.
Interest on capital is to be allowed @ 10% p.a.
The firm earned net profit of₹ 6,00,000 for the year ended 31st March, 2023.
Pass the Journal entry for interest on capital and prepare Profit & Loss Appropriation Account.
[Ans.: Dr. Profit & Loss Appropriation A/c by ₹ 1,00,000;
Cr. Kamal's Current A/c by ₹ 55,000 and Kapil's Current A/c by ₹ 45,000;
Share of Profit: Kamal—₹ 2,50,000 and Kapil—₹ 2,50,000.]
[Hint: Profit-sharing ratio between Kamal and Kapil is not given. Hence, they will share profit
equally.]
23. Simran and Reema are partners sharing profits in the ratio of 3 : 2. Their capitals as on
1st April, 2022 were ₹ 2,00,000 each whereas Current Accounts had balances of ₹ 50,000
and ₹ 25,000 respectively. Interest on capital is to be allowed @ 5% p.a. Net profit of the firm
for the year ended 31st March, 2023 was ₹ 3,00,000.
Pass the Journal entries for interest on capital and distribution of profit. Also prepare Profit &
Loss Appropriation Account for the year.
[Ans.: (i) Dr. Profit & Loss Appropriation A/c by ₹ 20,000;
Cr. Simran's Current AJc by ₹ 10,000 and Reema's Current AJc by ₹ 10,000;
(ii) 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 ₹
1,12,000.]
[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. Partnership Deed provided to allow interest on capital @ 10% p.a. The firm
earned net profit of ₹ 2,00,000 for the year ended 31st March, 2023.
Pass the Journal entry for interest on capital.
[Ans.: Dr. Profit & Loss Appropriation A/c by ₹ 90,000;
Cr. Anita's Capital A/c by ₹ 50,000 and Ankita's Capital A/c by ₹ 40,000.]
25. Ashish and Aakash are partners sharing profits in the ratio of 3:2. Their Capital Accounts
had credit balances of ₹ 5,00,000 and ₹ 6,00,000 respectively as on 31st March, 2023 after
debit of drawings during the year of ₹ 1,50,000 and ₹ 1,00,000 respectively. Net profit for the
year ended 31 st 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 Account.
[Ans.: (i) Dr. Profit & Loss Appropriation A/c by ₹ 1,35,000;
Cr. Ashish's Capital A/c by ₹ 65,000 and Aakash's Capital A/c by ₹ 70,000;
(ii) Share of Profit: Ashish—₹ 2,19,000 and Aakash—₹ 1,46,000.]
[Hint: Interest on capital is allowed on opening balances of capital.]
26. Naresh and Sukesh are partners with capitals of ₹ 3,00,000 each as on 31st March, 2023.
Naresh had withdrawn ₹ 50,000 against capital on 1st October, 2022 and ₹ 1,00,000 drawings
against profit. Sukesh also had 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.
[Ans.: For Interest on Capital: Dr. Profit & Loss Appropriation A/c by ₹ 82,500;
Cr. Naresh's Capital A/c by ₹ 42,500 & Sukesh's Capital A/c by ₹ 40,000;
For Profit distribution: Dr. Profit & Loss Appropriation A/c by ₹ 1,17,500;
Cr. Naresh's Capital A/c by ₹ 58,750 and Sukesh's Capital A/c by ₹ 58,750]
27. On 1st April, 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 & Loss Appropriation Account' of Jay and
Vijay for the year ended 31st March, 2014. (Delhi 2015)
[Ans.: Interest on Capital: Jay—₹ 4,800; Vijay—₹ 3,000.]
[Hint: Since the amount of net profit is less than the total amount of Interest on Capital, i.e., ₹
7,200 (Jay) + ₹ 4,500 (Vijay) = ₹ 11,700, the net profit has been distributed in the ratio of
interest claims of Jay and Vijay, i.e., ₹ 7,200 : ₹ 4,500 or 8 : 5.]
Calculation of Interest on Partners'Capitals
28. A and 8 are partners in the ratio of 3 :2. The firm maintains Fluctuating Capital Accounts
and the balance of the same as on 31st March, 2020 amounted to ₹ 1,60,000 and ₹ 1,40,000
for A and 8 respectively. Their drawings during the year were ₹ 30,000 each.
As per Partnership Deed, interest on capital @ 10% p.a. on opening capitals had been
provided to them. Calculate opening capitals of partners given that their profit was ₹ 90,000.
Show your workings clearly.
(CBSE Sample Paper 2020)
[Ans.: Opening Capital: A— ₹ 1,38,364; B— ₹ 1,31,636.]
29. Following is the extract of the Balance Sheet of Neelkant and Mahadev as on 31st March,
2023:
BALANCE SHEET as at 31st March, 2023

Liabilities ₹ Assets ₹

Neelkant's Capital 10,00,000 Sundry Assets 30,00,000

Mahadev's Capital 10,00,000

Neelkant's Current A/c 1,00,000

Mahadev'Current A/c 1,00,000

Profit & Loss A/c (2022-23) 8,00,000

30,00,000 30,00,000

During the year, Mahadev's drawings were ₹ 30,000. Profit during the year ended 31st March,
2023 is ₹ 10,00,000. Calculate interest on capital @ 5% p.a. for the year ending 31 st March,
2023. (NCERT, Modified)
[Ans.: Interest on Capital: Neelkant— ₹ 50,000; Mahadev— ₹ 50,000.]
30. From the following Balance Sheet of Long and Short, calculate interest on capital @ 8%
p.a. for the year ended 31st March, 2023:
BALANCE SHEET as at 31st March, 2023

Liabilities ₹ Assets ₹

Long's Capital A/c 1,20,000 Fixed Assets 3,00,000

Short's Capital A/c 1,40,000 Other Assets 60,000

3,60,000 3,60,000

During the year, Long withdrew ₹ 40,000 and Short withdrew ₹ 50,000. Profit for the year was
₹ 1,50,000 out of which ₹ 1,00,000 was transferred to General Reserve.
[Ans.: Interest on Long's Capital— ₹ 10,800; Interest on Short's Capital — ₹ 13,200.]
31. Amit and Bra m it started business on 1st April, 2022 with capitals of ₹ 15,00,000 and ₹
9,00,000 respectively. On 1st October, 2022, they decided that their capitals should be ₹
12,00,000 each. The necessary adjustments in capitals were made by introducing or
withdrawing by cheque. Interest on capital is allowed @ 8% p.a. Compute interest on capital
for the year ended 31st March, 2023.
[Ans.: Interest on Capital: Amit — ₹ 1,08,000; Bramit— ₹ 84,000.]
32. Moli and Bholi contribute₹ 20,000 and ₹ 10,000 respectively towards capital. They decide
to allow interest on capital @ 6% p.a. Their respective share of profits is 2 : 3 and profit for the
year is ₹ 1,500. Show distribution of profits:
(i) When there is no agreement except for interest on capitals; and
(ii) When there is an agreement that the interest on capital is a charge.
[Ans.: (i) Interest on Capital: Moli—₹ 1,000; Bholi—₹ 500; (ii) Loss: Moli—₹ 120; Bholi—₹
180.]
Salary or Commission to Partners
33. Shiv, Mohan and Gopal are partners sharing profits and losses in the ratio of 2 : 2 : 1. Shiv
is entitled to commission of 10% on the net profit. Net profit for the year is ₹ 1,10,000.
Determine the amount of commission payable to Shiv.
[Ans.: Commission payable to Shiv—₹ 11,000.]
34. Abha, Bobby and Vineet are partners sharing profits and losses equally. As per
Partnership Deed, Vineet is entitled to commission of 10% on the net profit after charging such
commission. Net profit before charging commission is ₹ 2,20,000.
Determine the amount of commission payable to Vineet.
[Ans.: Commission payable to Vineet—₹ 20,000.]
35. A, B, C and D are partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1. The firm
earned net profit of ₹ 1,80,000 for the year ended 31st March, 2023. As per the Partnership
Deed, partners will get 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.: Commission payable to the partners = 20/120 x ₹ 1,80,000 = ₹ 30,000
which will be shared as: A—₹ 6,000: B—₹ 9,000; C—₹ 6,000 and D—₹ 9,000.
Share of Profits: A—₹ 60,000; 8—₹ 45,000; C—₹ 30,000 and D—₹ 15,000.]
36. X and Y are partners in a firm. X is entitled to a 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 salary of ₹ 25,000 p.a. and commission of 10% of the net profit after charging
all commission and partners'salaries. Net profit before providing for partners'salaries and
commission for the year ended 31st March, 2023 was ₹ 4,20,000. Show distribution of profit.
[Ans.: X's Commission—₹ 27,500; Y's Commission—₹ 22,500; Net Profit—₹ 2,25,000; X
 and Y's Share—₹ 1,12,500 each.]
[Hint: Y's Commission = 10/110 of ₹ 2,47,500 (i.e., ₹ 4,20,000 - ₹ 1,20,000 (X's Salary) - ₹
25,000
(Y's Salary) - ₹ 27,500 (X's Commission)).]
Calculation of Interest on Partners' Drawings, Amount of Drawings and Rate of Interest
on Drawings
37. 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?
[Ans.: Interest on Drawings: Ram—₹ 3,600 and Mohan—₹ 2,400.]
[Hint: When the dates of drawings are not given, interest on drawings is calculated on the total
amount of drawings for average period of 6 months.]
38. Brij and Mohan are partners in a firm. They withdrew ₹ 48,000 and ₹ 36,000 respectively
during the year evenly in the middle of every month. According to the Partnership Deed,
interest on drawings is to be charged @ 10% p.a.
Calculate interest on drawings of the partners using the appropriate formula.
[Ans.: Interest on Brij's Drawings—₹ 2,400 and Interest on Mohan's Drawings—₹ 1,800.]
39. Dev withdrew ₹ 10,000 on 15th day of every month. Interest on drawings was to be
charged @ 12% per annum.
Calculate interest on Dev's Drawings. (CBSE2019)
[Ans.: Interest on Drawings—₹ 7,200.]
40. 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.
(CBSE Sample Paper 2018)
[Ans .: Interest on Drawings—₹ 810.].
41. A and 6 are partners sharing profits equally. A drew regularly ₹ 4,000 in the beginning of
every month for six months ended 30th September, 2022. Calculate interest on drawings @
5% p.a. for a period of six months.
[Ans.: Interest on Drawings—₹ 350.]
[Hint: Interest on drawings will be charged for average period of 3.5 months on total drawings.]
42. A and B are partners sharing profits equally. A drew regularly ₹ 4,000 at the end of every
month for six months ended 30th September, 2022. Calculate interest on drawings @ 5% p.a.
for a period of six months.
[Ans.: Interest on Drawings—₹ 250.]
[Hint: Interest on drawings will be charged for average period of 2.5 months on total drawings.]
43. B and C are partners sharing profits equally. C regularly 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 year ended 31 st March, 2023.
[Ans.: Interest on Drawings— ₹ 2,850.]
[Hint: Interest on drawings will be charged for 9.5 months on total drawings.]
44. 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 withdrew ₹ 7,500 during the middle of each quarter.
[Ans.: Interest on Drawings: Case I—₹ 1,875; Case 2—₹ 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 after taking into account drawings and net profit of ₹ 5,00,000. The
drawings of the partners during the year ended 31st March, 2024 were:
(i) Tisha withdrew ₹ 25,000 at the end of each quarter.
(ii) Divya's drawings were:
31st May, 2023 ₹ 20,000
1st November, 2023 ₹ 7,500
1st February, 2024 ₹ 12,500
Calculate interest on partners'capitals @ 10% p.a. and interest on partners'drawings @6%
p.a. for the year ended 31st March, 2024.

[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, B and C are partners. During the year ended 31st March, 2023, each of the partners
withdrew ₹ 10,000 regularly. A withdrew in the beginning of the first 6 months of the year, B
withdrew in the middle of the month for the first 6 months of the year and C withdrew at the
end of the month for the first 6 months. Calculate 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—₹ 2,550.]
47. Calculate the amount of Manan's monthly drawings for the year ended 31st March, 2023,
in the following alternative cases when Partnership Deed allows interest on drawings @ 10%
p.a.:
(i) If interest on drawings is ₹ 1,950 and he withdrew a fixed amount in the beginning of each
month.
(ii) If interest on drawings is ₹ 2,400 and he withdrew a fixed amount in the middle of each
month.
(iii) If interest on drawings is ₹ 2,750 and he withdrew a fixed amount at the end of each month.
[Ans.: Amount of Drawings: (i) ₹ 3,000; [ii) ₹ 4,000; [iii) ₹ 5,000.]
48. Calculate the amount of Shiv's quarterly drawings for the year ended 31st March, 2023, in
the following alternative cases when Partnership Deed allows interest on drawings @ 12%
p.a.:
(i) If interest on drawings is ₹ 1,500 and he withdrew a fixed amount in the beginning of each
quarter.
(ii) If interest on drawings is ₹ 1,200 and he withdrew a fixed amount in the middle of each
quarter.
(iii) If interest on drawings is ₹ 900 and he withdrew a fixed amount at the end of each quarter.
[Ans.: Amount of Drawings: (i) ₹ 5,000; [ii) ₹ 5,000; (iii) ₹ 5,000.]
49. Piyush, Harmesh and Atul are partners! Each partner regularly withdrew ₹ 20,000 per
month as given below:
(a) Piyush withdrew in the beginning of the month;
(b) Harmesh withdrew in the middle of the month; and
(c) Atul withdrew at the end of the month.
Interest on drawings charged for the year ended 31st March, 2023 was ₹ 15,600, ₹ 14,400
and ₹ 13,200 respectively.
Determine the rate of interest charged on drawings.
[Ans.: Rate of Interest on Drawings: Piyush—12%; Harmesh—12% and Atul— 12%.]
50. Calculate the Rate of interest on Drawings of Mohan in the following cases:
(a) If he withdrew ₹ 6,000 in the beginning of each quarter for the year ended 31st March,
2023 and interest on drawings is ₹ 1,500.
(b) If he withdrew₹ 6,000 at the end of each quarter for the year ended 31st March, 2023 and
interest on drawings is ₹ 900.
(c) It he withdrew ₹ 6,000 per quarter for the year ended 31 st March, 2023 and interest on
drawings is ₹ 1,200.
[Ans.: (a) 10%; (b) 10%and(c) 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 ₹ 2,00,000 and ₹ 1,50,000 respectively. The Partnership Deed provided as follows:
(a) Interest on capital be allowed @ 10% p.a.
(b) Amit to 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 ₹ 2,200 for Amit and ₹ 2,500 for Vijay.
Prepare Profit & Loss Appropriation Account.
[Ans.: Share of Profit: Amit- ₹ 75,420; Vijay—₹ 50,280.]
52. A and B are partners sharing profits and losses in the ratio of 3 : 1. On 1 st April, 2022,
their capitals were: A ₹ 5,00,000 and B ₹ 3,00,000. During the year ended 31st March, 2023,
the firm earned a net profit of ₹ 5,00,000. 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 ₹ 5,000 per month.
(d) B will get commission of 5% on profits after deduction of all expenses including such
commission.
Partners' drawings for the year were: A ₹ 80,000 and B ₹ 60,000. Net Sales for the year was
₹ 30,00,000.
After considering the above facts, you are required to prepare Profit & Loss Appropriation
Account and Partners'Capital Accounts.
[Ans.: Commission of B—₹ 15,810; Share of Profit: A—₹ 2,37,140; B—₹ 79,050;
Capital A/cs: A—₹ 7,47,140; 6—₹ 4,12,860.]