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Q 1:-

A,B & C are partners in M/s X Y Bros- Their Profit sharing ratio is 3:2:1
Balance Sheet of M/s XY Bros.
Liabilities
As Capital
Bs Capital
Cs Capital
Profit & Loss a/c.
Creditors
Total
Other in formations:-

Amount
100000
80000
70000
20000
50000
3,20,000

Assets

Amount
150000
80000
40000
20000
30000
3,20,000

Fixed Assets
Stock
Cash
Debtors
Cs Drawing
Total

(1) During the year firm earned Rs 90,000

(2) Drawing of Mr. A 40000, Mr. B Rs 30000 and Mr. C Rs 30000.
(3) Salary to Partners:- Mr. A 10000/-, Mr. B 20000/-, Mr. C 10000/After Compilation of above financial statement it is noticed that interest on
Capital @ 10% p.a. has not been Charged. Rectify the above errors and give the impact of
above by passing a journal entry.
Q 2:-

M/s ABC & Sons is a Partnership firm having 3 partners Mr. X, Y & Z since 2006, they submit you
are given following details:Year

Profit

2006- 07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13

100000
150000
(100000)
200000
180000
100000
400000

Profit & Loss Ratio

A
3
1
1
4
5
3
2

B
2
1
1
4
3
2
2

On 1st April 2012 they have been decided to change their Profit Sharing ratio 2;2;1.
w.e.f. 1-4-07. Pass necessary Journal entry to give the effect of above changes.
Q 3:-

Trial Balance of M/s ABC (31-3-12)

Liabilities
As Capital
Bs Capital
Cs Capital
Profit & Loss a/c.
Creditors
Total

Amount
100000
150000
100000
40000
60000
4,50,000

Assets
Fixed Assets
Stock
Cash
Debtors

Amount
200000
100000
80000
70000

Total

4,50,000

Partnership Accounting

C
1
1
1
2
2
1
1

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Other Details:(1)
There are 3 partners A,B,& C sharing profit & Losses in the ratio of 3:2:1.
(2)
During year ended on 31-3-13 the firm earn S a Profit of Rs 100000 before following
adjustments:(a) Salary A Rs 10000, C Rs 20000
(b) Bonus to B Rs 10000
(c) Interest on Capital @10% p.a.
(d) Interest on Drawing @ 6% p.a.
(e) Drawing of Mr. A Rs 15000, B Rs 10000, C Rs 10000
(f) Depreciation @ 10% p.a. on WDV basis.
Prepare final accounts.
Q4:-

A and B start business on 1st January, 2011 with capitals of RS 30,000 and Rs 20,000. According
to the Partnership deed, B is entitled to a salary of Rs 500 per month and interest is to be
allowed on capitals at 6% per annum. The remaining profit are distributed amongst the partners
in the ratio of 5:3, During 2011 the firm earned a profit, before Charging salary to B and Interest
On capital amounting to Rs 25,000. During the year A withdrew Rs 8,000 and B withdrew Rs
10,000 for domestic purposes. Give journal entries relating to division of profit.

Q5:-

Ram , Rahim and Karim are partners in a firm. They have no agreement in respect of profitsharing ratio, interest on capital, interest on loan advanced by partners and remuneration
payable to partners. In the matter of distribution of profit they have put forward the following
claims:
(1) Ram, who has contributed maximum capital demands interest on capital at 10% p.a. and
share of profit in the capital ratio, but Rahim and Karim do not agree.
(2) Rahim has devoted full time fore running the business and demands salary at the rate of Rs
500 p.m. But Ram and Karim do not agree.
(3) Karim demands interest on loan of 2,000 advanced by him at the market rate of interest
which is 12% p.a.
How shall you settle the dispute and prepare Profit and Loss Appropriation Account after
transferring 10% of the divisible profit to Reserve. Net profit before taking into account any of
above claims amounted to Rs 45,000 at the end of first year of their business.

Q6:-

A and B start business on 1st January ,2011, with capitals of Rs.30,000 and 20,000.According to
the Partnership Deed, B is entitled to a salary of Rs 500 per month and interest is to be allowed
on opening capitals at 6% per annum. The remaining Profits are to be distributed amongst the
partners in the ratio of 5:3 During 2011 the firm earned a profit, before charging salary to B and
interest on capital amounting to Rs. 25,000. During the year A withdrew Rs 8,000 and B
withdrew Rs 10,000 for domestic purpose.
Prepare Profit and Loss Appropriation Account.

Partnership Accounting

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Q7:-

A and B are Partners sharing profits and losses in the ratio of their effective Capital. They had
Rs. 1,00,000 and Rs 60,000 respectively in their Capital Accounts as on 1st January. 2011.
A introduced a further capital of Rs. 10,000 on 1st April, 2011 and another Rs.5,000 on 1st July ,
2011. On 30th September, 2011 A withdrew Rs 40,000.
On 1st July, 2011, B introduced further capital of Rs profit.
The partners drew the following amounts in anticipation of profit.
A drew Rs 1,000 per month at the end of each month beginning from January,
2011. B Drew Rs 1,000 on 30th June, and Rs 5000 on 30th September, 2011.
12%p.a. interest on capital is allowable and 10% p.a. interest on drawing is chargeable.
Date of closing 31.12.2011. Calculate: (a) Profit- sharing ratio; (b) Interest on
capital; and (c) Interest on Drawings.

Q8:-

Week, Able and Lazy are in partnership sharing and lossed in the ratio of 2:1:1. It is agreed that
interest on capital will be allowed @ 10% per annum and interest on drawings on drawings will
be charged @ 8% per annum. (No interest will be charged/ allowed Accounts).
The following are particulars of the Capital and Drawings Accounts of the partners:
Weak
Able
Lazy
Rs
Rs
Rs
Capital (1.1.2011)
75,000
40,000
30,000
Current Account (1.1.2011)
10,000
5,000 (Dr.) 5,000
Drawings
15,000
10,000
10,000
The draft accounts for 2011 showed a net profit of Rs 60,000 before taking into account interest
non capitals drawings and subject to following rectification of errors:
(a) Life Insurance premium of Weak amounting to Rs 750 paid by the firm on 30th June, 2011
has been charged to Miscellaneous Expenditure A/c.
(b) Repairs of Machinery amounting to Rs 10,000 has been debited to plant Account and
depreciation thereon charged @20%.
(c) Travelling expenses of Rs 3,000 of Able for a pleasure trip to U.K paid by the firm on 30th
June, 2011 has been debited to Travelling Expanses Account.
You are required to prepare the Profit and Loss Appropriation Account for the year ended 31st
December, 2011.

Q9:-

M/s X,Y & Sons admit a new partner Z and new partner Bring capital Rs 50000 to goodwill Rs
40000/.
P/L Ratio:X
Y
Z
Old Ratio
3
2
New Ratio
3
2
1
Journalise ?

Partnership Accounting

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Q10:- M/s X Y & Sons admit a new Partner Z and new partner Brings Capital Rs 50000 and be shown
his incapability to bring Rs 40000 of goodwill.
Profit & Loss Ratio:Old Ratio
New Ratio

X
3
3

Y
2
2

Y
1

Journalize?
Q11:-M/s XY admit Mr. Z as a new Partner who will bring good will Rs 30000 in cash afainst Share of
Project.
Profit & Loss Ratio:Old Ratio
New Ratio

X
3
2

Y
2
3

Z
1

Journalize?
Q12:- M/s X Y & Sons admit Mr. Z on a partner for share in profit And Loss: New Partner bring Rs
20000 In cash on account of goodwill. Balance sheet shows an amount of Rs 30000 as goodwill.
Profit & Loss Ratio of X & Y is 3:2. Journalize.
Q13:- The following is the Balance Sheet of Ram and Mohan, who share Profits in the ratio of 3:2 as on
1st January,2011:
Liabilities

Amount

Assets

Amount

Sundry Creditors
Rams Capital
Mohans Capital

15,000
20,000
25,000

Buildings
Plant and Machinery
Stock
Debtors
Bank

18,000
15,000
12,000
10,000
5,000

60,000

60,000

On this date shyam was admitted on the Following:

1. He is to pay Rs 25,000 as his capital and Rs 10,000 as his share goodwill for one fifty share in
Profits.
2. The new profit sharing ratio will be 5:3:2.
3. The assets are to be revalued as under:
Rs
Building
25,000
Plant and Machinery
12,000
Stock
12,000
Debtors (because of doubtful debts)
9,500

Partnership Accounting

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4. It was found that there was a Liability for Rs 1,500 for goods received but not recorded in books
Q 14:- Continuing with the same illustration 1, let us also give the Balance sheets of the partnership
from after Shyams admission.
Q15:- A and B are Partners sharing profits and losses in the ratio of 3:2 Their Balance Sheets as on
31.3.2011 is given below:
Liabilities
Creditors
Bills Payable
Capital Accounts:
A
B

Rs

Assets
30,000 Freehold premises
20,000 Plant
Furniture
2,00,000 Office equipment
1,00,000 Stock
Debtors
Bank
3,50,000

Rs
20,00,000
15,000
20,000
25,000
30,000
25,000
10,000
3,50,000

On 1.4.2011 they admit C On the following terms:

(1)
(2)
(3)
(4)

C will bring Rs 50,000 as a capital and Rs 10,0000 for goodwill for 1/5 share;
Provision for doubtful debts is to be made on debtors @ 2%
Stock to be written down by 10%
Freehold premises is to be revalued at Rs 2,40,000, plant at Rs.35,000, Furniture Rs 25,000 and
office equipment Rs 27,500.
(5) Partners agreed that the values of the assets and liabilities remain the same and as such, there
should not be any change in their books values as a result of the above mentioned
adjustments.
You are required to make necessary adjustment in the Capital Accounts of the partners and show
the Balance Sheet of the New Firm.

Partnership Accounting