Fundamentals of Partnership Test 1
1. In the absence of Partnership Deed, interest on loan of a partner is allowed:
(i) at 8% per annum.
(ii) at 6% per annum.
(iii) no interest is allowed.
(iv) at 12% per annum.
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(ii) at 6% per annum.
2. In the absence of partnership deed the profits of a firm are divided among the partners:
(a) In the ratio of capital
(b) Equally
(c) In the ratio of time devoted for the firm’s business
(d) According to the managerial abilities of the partners
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(b) Equally
3. On 1.4.2013, Brij and Nandan entered into partnership to construct toilets in government girls schools in the remote areas of Uttarakhand. They contributed capitals of ₹ 10,00,000 and ₹ 15,00,000 respectively. Their profit sharing ratio was 2 : 3 and interest allowed on capital as provided in the Partnership Deed was 12% per annum. During the year ended 31.3.2014, the firm earned a profit of ₹ 2,00,000.
Prepare Profit and Loss Appropriation Account of Brij and Nandan for the year ended 31.3.2014.
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IF THE PROFIT IS LESS THAN IOC THEN INTEREST WILL BE GIVEN TO THE EXTENT OF PROFIT ONLY, IN CAPITAL RATIO.
4. Kanika and Gautam are partners doing a dry cleaning business in Lucknow, sharing profits in the ratio 2 : 1 with capitals Rs. 5,00,000 and Rs. 4,00,000 respectively. Kanika withdrew the following amounts during the year to pay the hostel expenses of her son:
1st April ₹ 10,000
1st June ₹ 9,000
1st November ₹ 14,000
1st December ₹ 5,000
Gautam withdrew ₹ 15,000 on the first day of April, July, October and January to pay rent for the accommodation of his family. He also paid Rs. 20,000 per month as rent for the office of partnership which was in a nearby shopping complex.
Calculate Interest on Drawings @ 6%p.a.
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5. On March 31st, 2014, the balances in the capital accounts of Esha, Manav and Daman after making adjustments for profits and drawings were ₹ 3,20,000, ₹ 2,40,000 and ₹ 1,60,000 respectively. Subsequently, it was discovered that the interest on capital and drawings had been omitted.
• The profit for the year ended on 31st March, 2014 was ₹ 90,000.
• During the year, Esha and Manav each withdrew a sum of ₹ 48,000 in equal instalments in the middle of every month and Daman withdrew ₹ 60,000.
• The interest on drawings was to be charged @ 5% p.a. and interest on capital was to be allowed @ 10% p.a.
• The profit sharing ratio of the partners was 3 : 2 : 1.
Showing your workings clearly pass the necessary rectifying entry.
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6. Yadu, Vidu and Radhu were partners in a firm sharing profits in the ratio of 4 : 3 : 3. Their fixed capitals on 1st April, 2018 were ₹ 9,00,000, ₹ 5,00,000 and ₹ 4,00,000 respectively. On 1st November, 2018, Yadu
gave a loan of ₹ 80,000 to the firm. As per the partnership agreement :
(i) The partners were entitled to an interest on capital @ 6% p.a.
(ii) Interest on partners’ drawings was to be charged @ 8% p.a.
The firm earned profits 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 and Loss Appropriation Account for the year ending 31st March, 2019.
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