PRACTICE QUESTIONS FUNDAMENTALS OF PARTNERSHIP FIRM

1. A and B are partners sharing profits in the ratio of 3 : 2 with capitals of Rs. 100000 and Rs. 60000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of Rs. 3000. A provision of 5% of the profits is to be made in respect of Manager's commission. During 2019, the profits of  the year before 
calculation of interest on capital but after charging B's salary amounted to Rs. 25000. Prepare an account showing the allocation of profits and partners' capital accounts. 

2. Jay and Veeru are partners sharing profits and losses in the ratio of 3:2 with capitals of Rs.                100000 and Rs. 60,000 respectively. The profits for the year prior to calculation of interest on capital but after charging salary of partners amounted to Rs. 80000.X is entitled to a salary of Rs. 9600 p.a. together with a commission of 10% of net  Profit remaining after deducting interest on capitals and salary but before charging any  commission. Y is entitled to a salary of Rs. 1200 per month together with a commission of 10% of Net profit remaining after deducting interest on capitals and salary and after charging all commissions. Each partner is entitled to 5% interest on his capital. Prepare partners' Capital Accounts: 1) When capitals are fixed, and  ii) when capitals are. fluctuating.

Note:(1) Calculation of interest on Capital: Interest for 3 month i.e. from 1st April to 30th  June 2019

3. P and Q are partners with capitals  of Rs. 300000 and Rs. 200000 respectively. The profit and Loss Account of the firm showed a net Profit of Rs. 200000 for the year. Q is entitled to get a commission of 5% on net profit. after deducting all remuneration to partners 10% will be transfer to reserve a/c. interest on drawing is 6%. p's drawing is 40000 and q's drawing is 50000 respectively.  Prepare Profit and Loss account after taking the following into consideration:

4.   Jay, veeru and thakur are partners in a firm with fixed capital of 100000, 75000 and 50000. their current account balance is 5000, 2000 and 1500 respectively. interest on capital 10%, interest on drawing 6%. 12500 Rs. transfers to reserve account profit sharing ratio is 5:3:2 and firm's net profit is 200000.  prepare P&L appropriation a/c when capital is fixed. 

5.   Gabbar and sambha started a partnership business on 1st April 2018. The balance in their capital 150000 and 100000 and the balance of their current accounts are 50000 and 40000. As per partnership deed gabbar is to be paid salary of Rs. 7200 annually, sambha is to get a commission of 5% on profit. the rate of interest on capital is 5%. Their drawings for the year was 20000 and 8000. the net profit for the year after charging gabbar's salary was 260000. gabbar withdrew 48000 and sambha withdrew 36000 during the year in middle of each quarter. prepare the profit and loss appropriation account and partner's capital account.

1    6)   A, B AND C ARE PARTNERS IN A FIRM HAVING CAPITALS OF 50000, 300000 AND 20000. THEIR INTEREST ON CAPITAL 10%. DRAWINGS ARE 1200 OF A AND 800 OF C DURING THE YEAR. WHILE PREPARING FINAL ACCOUNTS IT WAS FOUND THAT INTEREST ON CAPITAL AND DRAWING WERE OMITTED. THE NET PROFIT DURING THE YEAR WAS 260000 Rs.

PASS THE ADJUSTMENT ENTRY FOR THE OM MISSION.

2     7 )  GABBAR AND KALIA ARE THE PARTNERS OF A FIRM.  THE CLOSING BALANCE OF THERE CAPITALS ARE 420000 Rs. AND 350000 Rs. OF 31^st MARCH 2018. DURING THE YEAR KALIA INTRODUCED AN ADDITIONAL CAPITAL OF 50000 Rs AND GABBAR WITHDRAW FROM HIS CAPITAL HIS CAPITAL 200000 Rs. THEIR INTEREST ON CAPITAL AND DRAWING 5%.  WHILE PREPARING FINAL ACCOUNTS IT WAS FOUND THAT THE ABOVE ADJUSTMENT HAD NOT BEEN MADE.

PASS THE ADJUSTMENT ENTRIES.

3    8)  JAY AND VEERU STARTED A BUSINESS IN PARTNERSHIP. THE CLOSING BALANCE OF THEIR CAPITALS ARE Rs 100000 AND Rs 80000 RESPECTIVELY. THEIR INTEREST ON CAPITAL IS 6%.VEERU GETS  Rs 900 MONTHLY SALARY AND JAY GETS A COMMISSION OF Rs 2000. ON 1^ST MAY 2018 VEERU INTRODUCED Rs 100000 AS ADDITIONAL CAPITAL AND JAY WITHDRAW Rs 20000 FROM HIS CAPITAL. ON 31^st OF OCT. VEERU WITHDRAW Rs 50000 FROM HIS CAPITAL AND JAY

INTRODUCED Rs 60000 IN HIS CAPITAL. THE NET PROFIT OF THE FIRM BEFORE CHARGING  PREPARE THE PROFIT AND LOSS ADJUSTMENT ACCOUNT AND PARTNERS CAPITAL ACCOUNT.

4     9)   X, Y AND Z ARE PARTNERS IN A FIRM WITH CAPITALS OF Rs. 400000, 350000 AND 300000. THE INTEREST ON CAPITAL 10% AND DURING THE YEAR THEIR DRAWINGS WAS 1200 EACH. X GETS A SALARY OF Rs. 12000 p.a  AND Y GETS Rs. 8000. Z GETS A COMMISSION OF Rs. 3000. THE NET PROFIT OF THE FIRM AFTER CHARGING SALARY BUT BEFORE CHARGING  COMMISSION WAS Rs. 320000. PREPARE THE PROFIT AND LOSS APPROPRIATION ACCOUNT AND PARTNERS CAPITAL ACCOUNT WHEN,

a)   CAPITAL IS FIX.

b)  CAPITAL FLUCTUATES.