Worksheet: Chapter 1

Q1. Rohit, Raman and Raina are partners in a firm. Their capital accounts on 1st April, 2019, stood at
`2,00,000, `1,20,000 and `1,60,000 respectively. Each partner withdrew `15,000 during the financial year
2019-20. As per the provisions of their partnership deed: (a) Interest on capital was to be allowed @ 5%
per annum. (b) Interest on drawings was to be charged @ 4% per annum. (c) Profits and losses were to be
shared in the ratio 5:4:1. The net profit of `72,000 for the year ended 31st March 2020, was divided
equally amongst the partners without providing for the terms of the deed. You are required to pass a
single adjustment entry to rectify the error (Show workings clearly). 4

Q2. A&B are partners in the ratio of 3:2. The firm maintains fluctuating capital accounts and the balance
of the same as on 31-03-2020 amounted to `1,60,000 and `1,40,000 for A and B 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
profits were `90,000. Show your workings clearly.

Q3. Ajay, Binod and Chandra entered into partnership on 1st April 2019 with a capital of `3,00,000,
`2,00,000 and `1,00,000 respectively. In addition to capital Chandra has advanced a loan of `1,00,000.
Since they had no agreement to guide them, they faced following issues during and at the end of the
year. 1. Ajay wanted interest on capital to be provided @8% pa but Binod and Chandra did not agree. 2.
Chandra wanted that interest on loan be paid to him @ 10% pa but Ajay and Binod wanted to pay @ 5%
pa. 3. Ajay and Binod demanded to share profits in the ratio of their capital contribution, Chandra is not
in agreement with this proposal. 4. Binod, being working partner, demands a lump sum payment of
`40,000 as remuneration for which other others partners are not in agreement. You are required to
suggest and help them resolve these issuesfv 8`

Q4. Which of the following items is not dealt through Profit and Loss Appropriation Account? a. Interest
on Partner’s Loan b. Partner’s Salary c. Interest on Partner’s Capital d. Partner's Commission.

Q5. Amit, a partner in a partnership firm withdrew ₹ 7,000 in the beginning of each quarter. For how
many months would interest on drawings be charged?

Q6. Maanika, Bhavi and Komal are partners sharing profits in the ratio of 6:4:1. Komal is guaranteed a
minimum profit of ₹ 2,00,000. The firm incurred a loss of ₹22,00,000 for the year ended 31st March,2018.
Pass necessary journal entry regarding deficiency borne by Maanika and Bhavi and prepare Profit and
Loss Appropriation Account

Q7. The partners of a firm, Alia, Bhanu and Chand distributed the profits for the year ended 31st March,
2017, ₹ 80,000 in the ratio of 3:3:2 without providing for the following adjustments: a) Alia and Chand
were entitled to a salary of ₹ 1,500 each p.m. b) Bhanu was entitled for a salary of ₹ 4,000 p.a. Pass the
necessary Journal entry for the above adjustments in the books of the firm. Show workings clearly.

Q8. 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.

Q9. Mudit, Sudhir and Uday are partners in a firm sharing profits in the ratio of 3:1:1. Their fixed capital
balances are ₹ 4,00,000, ₹ 1,60,000 and ₹1,20,000 respectively.Net profit for the year ended 31st March,
2018 distributed amongst the partners was ₹1,00,000, without taking into account the following
adjustments: a) Interest on capitals @ 2.5% p.a.; b) Salary to Mudit ₹ 18,000 p.a. and commission to Uday
₹ 12,000 c) Mudit was allowed a commission of 6% of divisible profit after charging such commission.
Pass a rectifying journal entry in the books of the firm. Show workings clearly.

Q10. The partners of a firm, Alia, Bhanu and Chand distributed the profits for the year ended 31st March,
2017, ₹ 80,000 in the ratio of 3:3:2 without providing for the following adjustments: a) Alia and Chand
were entitled to a salary of ₹ 1,500 each p.a. b) Bhanu was entitled for a commission of ₹ 4,000 c) Bhanu
and Chand had guaranteed a minimum profit of ₹ 35,000 p.a. to Alia any deficiency to borne equally by
Bhanu and Chand. Pass the necessary Journal entry for the above adjustments in the books of the firm.
Show workings clearly.

Q11. Six friends started a partnership business by investing Rs. 2,00,000 each. They decided to share
profit equally. Name the terms by which they will be called individually and collectively. 1

Q12. 2. A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. B was guaranteed a profit
of Rs. 2,00,000. During the year the firm earned a profit of Rs. 84,000. Calculate the net amount of
Profit / Loss transferred to the capital accounts of A and C.1

Q13. March 31, 2017 is as follows: Balance Sheet as at March 31, 2017

Particulars Amount Particulars Amount

Capitals: Fixed Assets 360000
Himanshu 2,00,000 Current Assets 60000
Vikrant 1,40,000 340000
Creditors 60000
Profit and loss account 20000

During the year 2016-17, Himanshu’s Drawings were Rs. 30,000 and Vikrant’s Drawings were Rs. 40,000.
While distributing profits for the year 2016-17, interest on capital @ 5 % per annum and interest on
drawings @ 12 % per annum were ignored. Showing your workings clearly, pass necessary rectifying
entry.

Q14. A and B are partners. The net divisible profit as per Profit and Loss Appropriation A/c is `2,50,000.
The total interest on partner’s drawing is `4,000. A’s salary is `4,000 per quarter and B’s salary is `40,000
per annum. Calculate the net profit/loss earned during this year.

Q15. Kavita, Meenakshi and Gauri are partners doing a paper business in Ludhiana. After the accounts of
partnership have been drawn up and closed, it was discovered that for the years ending 31st March 2013
and 2014, interest on capital has been allowed to partners @ 6% p.a. although there is no provision for
interest on capital in the partnership deed. Their fixed capitals were 2,00,000; 1,60,000 and 1,20,000
respectively. During the last two years they had shared the profits as under: Year Ratio 31 March 2013
3:2:1 31 March 2014 5:3:2 You are required to give necessary adjusting entry on April 1, 2014