DELHI PUBLIC SCHOOL

ACCOUNTANCY - (Subject Code : 055)

Topic : PARTNERSHIP FUNDAMENTALS

. Class – XII Worksheet No.: 1

1. What is meant is Fixed Capital ?

2. What is the purpose of maintaining partner’s current account in the firm ?
3. List any four occasions on which a partnership firm is reconstituted ?
4. Differentiate between Partners Fixed & Fluctuating Capital Account ?
5. State the provisions of India under “Indian Partnership Act, 1932” relating to sharing of profits in the absence
of any provision in the Partnership Deed ?
6. List any two circumstances under which the Fixed Capital of Partners may change ?
7. Ram and Mohan are partners in a firm without partnership deed. Mohan is an active partner and claims a
salary of Rs. 10,000 per month. State with reasons whether the claim is valid or not.
8. Profit & Loss Appropriation Account is prepared to_____ .
9. Name any six items which are shown in “Profit & Loss Appropriation Account”?
10. List any two items appearing on the debit side of a Partner’s Current Account ?
11. What is the formula for the Calculation of Manager’s Commission ?
12. State the conditions under which the capital balances may change under the system of a Fixed Capital
Account.
a. When capital is withdrawn permanently
b. When current accounts are prepared
c. When there is loss in the business
d. When partnership deed is silent

13. Calculate interest on drawing of Mr. Arun @10% p.a for the year ended 31st March 2007 in each of the
following alternative cases:-
(i) if he withdrew 60,000 during a year.
(ii) if he withdrew 15,000 at the end of the each quarter.

14. X & Y are partners with a profit sharing ratio of 1:2 with capitals of Rs. 4,00,000 & Rs. 6,00,000 respectively.
On Ist October, 04, X & Y granted loans of Rs. 1, 00,000 & 60,000 respectively to the firm. Distribute the
profit/losses amongst the partners for the year ended 31st March, 05 If the loss before interest for the year
amounted to Rs. 7,500.

15. A, B and C started a business in partnership. A contributes Rs. 50,000 for the whole year. B introduces Rs.
40,000 at first and increased it to Rs. 46,000 at the end of four months but withdrew Rs 16,000 at the end of
nine months. C invests Rs. 80,000 at first but withdrew Rs. 20,000 at the end five months. Firm earned a profit
of Rs. 23, 750 during the year. You are required to show the division of profit on the basic of the effective
employed by each partner during the year.

16. A,B and C are partners in a firm. After the accounts of partnership have been drawn up and the books closed
off, it is discovered that for the year 2005 and 2006, interest has been allowed to the partners upon their
capitals @ 6% p.a. although there is no provision for interest in the partnership deed. Their fixed capital on
which interest was calculate were Rs. 1,00,000, Rs. 80,000 and Rs. 60,000 respectively. During the two years,
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 they have shared the profits as follows: For year 2005 - 3:2:1 & year 2006 - 5:3:2. You are required to give
journal entries on 1-1-2007.
17. Ram and Gopal were partners in a firm sharing profits in the ratio of 3:2. ON 1.1.2007 their fixed capitals
were Rs. 1,00,000 and Rs. 1,50,000 respectively. On 31.3.2007 they decided that their total capital (fixed)
should be Rs. 3,00,000. It was further decided that the chital (fixed) should be in their profit sharing ratio.
Accordingly they introduced or withdrew the necessary capital. The partnership deed provided the following:
(i)Interest on capital @ 12% p.a.
(ii) Interest on drawings @ 18% p.a &
(iii)Monthly salary to Ram @ Rs. 2,000 per month and to Gopal @ Rs.3,000 per month.
The drawings of Ram and gopal during the year were as follows:
Date Ram - Gopal
July 1 , 2007 Rs. 10,000 Rs. 12,000
September 30, 2007 Rs. 15,000 Rs. 12,000
The profit by the firm for the year ended 31.12.2007 was Rs. 2,00,000. 10% of this profit was to be kept in a reserve.
Prepare: (i) Profit and Loss Appropriation Accounts (ii) Capital Account of Ram and Gopal and (iii) Current Accounts
of Ram & Gopal.

18. A, B and C are in partnership. A and B sharing profits in the ration of 3:1 and C receiving an annual salary of
Rs. 32,00 plus 5% of the profit are charging his salary and commission or 1/4th of the profit of the firm
whichever is larger. Any excess of the latter over the former received by C is, under the partnership deed, to be
come by A and B in the ratio of 3:2. The profit for the year 2006 came to Rs. 1,68,000 after charging C’s
salary. Show the distribution of profits among the partners.

19. A, B and C were partners in a firm. On 1-4-2005 their capitals stood at Rs 50,000, Rs 25,000 and Rs. 25,000
respectively. As per the provisions of the partnership deed:
(i)C was entitled for a salary of Rs. 5,000 p.a.
(ii) Partners were entitled to interest on capital at 5% p.a
(iii) Profits were to be shared in the ratio of partner’s capital.
The net profit for the year 2005-06 of Rs. 33,000 was divided equally without providing for the above terms. Pass an
adjustment entry to rectify it.

20. X, Y and Z are partners with fixed capitals of Rs.1,50,000, Rs.1,20,000 and Rs.1,00,000 respectively. The
Balance of current accounts on 1st January, 1992 were X Rs.8,000 (Cr.); Y Rs.3,000 (Cr.) and Z Rs.2,00.0
(Dr.), A advanced Rs.20,000 on July 1, 1992. The partnership deed provided for the following :
(a) Interest on Capital at 5%.
(b) Interest on drawings at 6%. Each partner drew Rs.10,000 on July 1, 1992.
(c) Rs.20,000 is to be transferred to a Reserve Account.
(d) Profit and Loss to be shared in the proportion of 3 : 2 : 1 upto Rs.60,000 and above Rs.60,000 equally. Net
profit of the firm before above adjustments was Rs.1,15,400.
From the above information, prepare Profit and Loss Appropriation Account, Capital and Current Accounts of the
partners.

21. X and Y are partners with a profit sharing ratio of 1 : 2 with capitals of Rs.4,00,000 and Rs.6,00,000
respectively. On 1st October, 2004 X and Y granted loans of Rs.1,00,000 and Rs.60,000 respectively to the
firm. Distribute the profit / losses amongst the partners for the year ended 31st March, 2005 in each of the
following cases :
Case (a) If the profit before interest for the year amounted to Rs.12,000.
(b) If the profit before interest for the year amounted to Rs.3,000.
(c) If the profit before interest for the year amounted to Rs.7,500.

22. A, B and C were partners in a firm having capitals of Rs. 80,000, 80,000 and 1,40,000respectively. According
to partnership deed the partners were entitled to interest on capital @ 5% p.a B was also entitled annual salary
of Rs. 6,000. The profit were to be divided as follows:
(i) The first 30,000 in proportion to capitals of partners.
(ii) Next Rs. 30,000 in the ratio of 5:3:2.
(iii) Remaining profits to be shared equally.
During the year the firm made a profit of Rs. 1,56,000 before charging any of the above items. Prepare the profit &
loss appropriation A/c.
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 23. A and B are partners sharing profits and losses in the ratio of 3 : 1. Their capitals at the end of the financial
year 2005-2006 were Rs.6,00,000 and Rs.3,00,000. During the year 2005-2006, A’s drawings were Rs.80,000
and the drawings of B were Rs.40,000, which had been duly debited to partner’s capital accounts. Profit
before charging interest on capital for the year was Rs.80,000. The same had also been credited in their profit
sharing ratio. H had brought additional capital of Rs.70,000 on October 1, 2005. Calculate interest on capital
@ 12% p.a. for the year 2005-2006.

24. L, M and N partners have omitted interest on capitals for three years ended on 31st December, 1993. Their
fixed capitals in three years were L Rs.40,000, M Rs.25,000, N Rs.15,000. Rate of interest on capital is 12%
p.a. Their profit sharing ratios were 1991 – 5 : 2 : 1, 1992 – 3 : 2 : 1, 1993 – 2 : 1 : 1. Give the necessary
adjusting entry.

25. X and Y are partners sharing profits and tosses in the ratio of 3 : 2. X being a non-working partner contributes
Rs. 20,00,000 as his capital. Y being a working partner agreed to work for the firm. The partnership deed
provides for interest on capital @ 8% and salary to every working partner @ Rs. 8,000 per month. The net
profit before providing for interest on capital and partners salary for the year ended March 31,2008 was Rs.
80,000. Show the distribution of profits.

26. Nitin, Nidhi & Rishi were partners in a firm. On 1st April, 2010, their fixed capital stood at ` 80,000; ` 40,000
& ` 40,000 respectively. As per provisions of partnership deed :
a. Nidhi was entitled for a salary of ` 5,000 p.a.
b. All the partners were entitled to interest on capital @5% p.a.
c. Profits were to be shared in the ratio of their capitals.
The Net Profit for the year ending 31-03-2011 of ` 36,000 and 31-03-2012 of ` 51,000 was divided equally
without providing for the above terms. Pass an adjustment entry to rectify the errors.

27. X, Y and Z started a business in partnership and contributed ` 1,00,000, ` 80,000 and ` 60,000 respectively,
as their capitals. They agreed to share profits and losses in the ratio of 3 : 2 : 1 after allowing interest on
capital @ 10% p.a. and charging interest on drawings @ 12% p.a. The drawings of the partners during the
year ended 31st Dec., 1996 were: X ` 12,000; Y ` 15,000 and Z ` 6,000. Z, to whom a salary of ` 1,000
p.m. was payable, had guaranteed that the firm would earn a profit of ` 75,000 before charging or allowing
interest and salary payable to the partners. The actual profit before interest and salary amounted to ` 90,000.
Prepare Profit and Loss Appropriation A/c and Partner’s Capital Account.

28. Give formula for the calculation of Interest on Drawings in following cases :-
(a) Amount withdrawn @ ` 500 per month on the first day of month for six months, Rate of Interest on Drawings
is @10% p.a.
(b) Amount withdrawn @ ` 500 per month on the last day of month for nine months, Rate of Interest on
Drawings is @10% p.a.
(c) When the date of withdrawl is not given & ` 1000 is withdrawn monthly, Rate of Interest on Drawings is
@10% p.a.
(d) Amount withdrawn ` 20000 during the year and Rate of Interest is 10%.

29. Ashish and Binay decided to start a partnership firm. They contributed capitals of ` 2,00,000 and ` 1,00,000
on 1st April, 2017. Ashish expressed his willingness to admit Charu as a partner without Capital. Binay agreed
to it. On 30th September, 2017, Binay granted a loan of ` 1,20,000 to the firm. The terms of partnership were
as follows :
i. Profits & Losses will be shared in the ratio of 2:2:1.
ii. Interest on Capital @6% per annum.
iii. Interest on Drawing @5%.
iv. Ashish to get a monthly salary of ` 6,000 and Binay to get a salary a quarterly of ` 4,000.
v. 10% of the profits before charging interest on drawings but after making appropriations are to be
transferred to General Reserve.
Due to shortage of capital, Ashish contributed ` 50,000 on 1st October, 2017 & Binay contributed ` 20,000 on
31st December, 2017 as further capital. The profit of the firm for the year ended 31st March, 2018 was ` 3,37,800.
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 Drawings of Ashish and Binay were ` 50,000 & ` 40,000 respectively. Prepare Profit & Loss Appropriation
Account for the year ending 31st March, 2018.

30. N and B are Partners in a firm. They withdrew ` 60,000 and ` 48,000 respectively during the year evenly at
the end of every month. According to the Partnership agreement, interest on drawing is to be charged @
10%p.a. Calculate the interest on drawings of the partners using appropriate formula.

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