ISC 12 fundamentals of partnership questions (previous papers)

ISC 12 fundamentals of partnership questions

Format of Profit and loss Appropriation Account

Questions 1.

The fixed capital accounts of Shiv, Azeem and Angad, sharing profits and losses in the ratio of 2:2:1, stood at ₹4,00,000, ₹6,00,000 and ₹2,00,000 respectively.

The accounts for the year ended 31st March, 2022, were drawn up and closed and the Current Account balances of the partners were determined to be:

Shiv ₹35,000, Azeem ₹40,000 and Angad ₹25,000. Subsequently the following errors were discovered on 1st April, 2022:

(a) Interest on capital @ 10% per annum had been allowed to the partners, although there was no provision for it in the partnership deed.

(b) Salary of ₹16,000 per annum to Shiv and ₹20,000 per annum to Azeem was not allowed to them, despite a provision for salary in the partnership deed.

(c) Commission of ₹24,000 was not allowed to Angad, despite a provision for commission in the partnership deed.

You are required to prepare the adjusted Current Accounts of the partners on 1st April, 2022, to rectify the lapse in accounting.(ISC 2023)

ISC 12 fundamentals of partnership questions (previous papers)

Questions 2.

Ruma and Neha started business on 1st April, 2021, with fixed capitals of  ₹4,00,000 and ₹3,50,000 respectively.

On 1st October, 2021, they decided that their total capital (fixed) should be ₹ 8,00,000, in their profit-sharing ratio of 3:2. Accordingly, they introduced extra capital or withdrew excess capital.

Their partnership deed provided for the following:

(a) Interest on capital to be allowed @ 10% per annum.

(b) A monthly salary of 1,000 each to be allowed to both Ruma and Neha.

(c) Interest on drawings to be charged @ 18% per annum.

Ruma had withdrawn ₹12,000, during the year. As per the deed, the interest on her drawings amounting to ₹1,080 to be charged from her.

During the year ending 31st March, 2022, the firm earned a net profit of ₹2,04,000 before charging manager’s commission of ₹20,400 and interest on bank loan of ₹4,000.

You are required to:

(i) Give the journal entry to close Ruma’s Drawings Account.

(ii) Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2022. (ISC 2023)

ISC 12 fundamentals of partnership questions (previous papers)

Important questions of fundamentals of partnership

Questions 3.

Ajay and Vijay are in partnership sharing profits and losses in the ratio of 3:1.
On 1st April, 2021, their capitals were ₹ 1,00,000 and ₹ 90,000.
The terms of their partnership are as follows:
(i) Interest on capital to be allowed at @ 6% per annum.
(ii) Interest on drawings to be charged @ 4% per annum.
(iii) Partners to get a salary of ₹1,000 each per month.
(iv) Vijay to get a commission of 2% on the correct net profit.
(v) Any partner taking a loan from the firm to be charged interest on it @ 8% per annum.
Ajay had borrowed ₹ 10,000 from the firm on 1st October, 2021.
Vijay had withdrawn ₹ 8,000 on 1st July, 2021.
During the year ending 31st March, 2022, the firm earned a net profit of ₹ 60,000 before
any of the provisions mentioned in the partnership deed.
You are required to prepare for the year ending 31st March, 2022:
(i) Profit and Loss Appropriation Account.
(ii) Ajay’s Capital Account. (ISC specimen paper 2023)

ISC 12 fundamentals of partnership questions (previous papers)

Questions 4.

The partnership agreement of Rohit, Ali and Sneh provides that:
(i) Profits will be shared by them in the ratio of 2:2:1.
(ii) Interest on capital to be allowed at the rate of 6% per annum.
(iii) Interest on drawings to be charged at the rate of 3% per annum.
(iv) Ali to be given a salary of ₹ 500 per month.
(v) Ali’s guarantee to the firm that the firm would earn a net profit of at least ₹ 80,000 per
annum and any shortfall in these profits would be personally met by him.
The capitals of the partners on 1st April, 2021, were:
Rohit – ₹ 1,20,000; Ali- ₹ 1,00,000; Sneh- ₹ 1,00,000.
All the three partners withdrew ₹1,000 each at the beginning of every month.
The net profit for the year 2021-22 was ₹ 70,000.
You are required to prepare for the year 2021- 2022:
(i) Profit and Loss Appropriation Account.
(ii) Ali’s Capital Account. (ISC specimen paper 2023)

ISC 12 fundamentals of partnership questions (previous papers)

Questions 5.

Arun and Barun are partners in a firm sharing profits and losses equally. Their capitals on
1st April, 2015, were ₹ 4,80,000 and ₹ 5,40,000. On 1st October, 2015, they decided that
the total capital of the firm should be ₹10,00,000, to be contributed equally by both of
them. According to the partnership deed, interest on capital is allowed to the partners
@ 6 % p.a .
You are required to compute interest on capital for the year ending 31st March, 2016.(ISC specimen paper 2017)

Important questions of fundamentals of partnership-2

Questions 6.

Xen, Sam and Tim are partners in a firm. For the year ended 31st March, 2019,
the profits of the firm ₹ 1,20,000, were distributed equally amongst them, without providing for the following provisions of the partnership deed:
(a) Sam’s guarantee to the firm that the firm would earn a profit of at least ₹ 1,35,000. Any shortfall in these profits would be personally met by him.
(b) Profits to be shared in the ratio of 2:2:1.
You are required to pass the necessary journal entries to rectify the error in accounting. (ISC 2020)

ISC 12 fundamentals of partnership questions

Questions 7.

The capital accounts of Asif and Benny stood at ₹ 30,000 and ₹ 40,000 respectively after the
necessary adjustments in respect of drawings and net profit for the year ended 31st March, 2016.
It was subsequently ascertained that interest on capital @ 10% per annum and interest on
drawings @ 5 % per annum were not taken into account in arriving at the divisible profits for
the year.
The drawings of the partners had been: Asif ₹ 1,200 drawn at the end of each half year and
Benny ₹ 1,200 drawn at the end of each quarter.
The net profit for the year amounted to ₹ 20,000. The partners share profits and losses in the
ratio of 3:2.
You are required to:
(i) Pass the necessary journal entries to rectify the lapse in accounting.
(ii) Prepare the adjusted capital accounts of the partners. (ISC 2017)

ISC 12 fundamentals of partnership questions (previous papers)

Questions 8.

Anita and Tony, each doing business as sole proprietors, started a partnership on
1st April, 2018. Anita brought in Plant and Machinery valued at ₹ 5,00,000 whereas
Tony brought in furniture costing ₹ 50,000 and ₹ 7,00,000 in cash.
Since the business needed more funds, Tony gave a loan of ₹ 2,00,000 to the firm on
30th June, 2018.
Their partnership deed provided for:
(a) Interest on capital to be allowed @10% per annum.
(b) Interest on drawings to be charged @ 6% per annum.
(c) Anita to be given a commission of 4% on the corrected net profits before charging commission.
(d) Tony to be given a salary of ₹ 12,000 per annum.
Tony withdrew ₹ 5,000 at the end of every month and Anita withdrew ₹ 30,000
on 1st August,2018.
The net profit of the firm, for the year 2018-19, after debiting Tony’s salary of ₹ 12,000 per annum but before considering any interest due to and due from the partners, was ₹ 4,00,000.
You are required to prepare for the year 2018-19:
(i) Profit and Loss Appropriation Account.
(ii) Partners’ Capital Accounts. (ISC 2020)

ISC 12 fundamentals of partnership questions

Important questions of fundamentals of partnership-5

Questions 9.

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3:2.
Their fixed capitals as on 1st April, 2016, were ₹ 6,00,000 and ₹ 4,00,000 respectively.
Their partnership deed provides for the following:
(a) Partners are to be allowed interest on their capital @ 10% per annum.
(b) They are to be charged interest on drawings @ 4% per annum.
(c) Asif is entitled to a salary of ₹ 2,000 per month.
(d) Ravi is entitled to a commission of 5% of the correct net profit of the firm
before charging such commission.
(e) Asif is entitled to a rent of ₹ 3,000 per month for the use of his premises
by the firm.
The net profit of the firm for the year ended 31st March, 2017, before providing for any
of the above clauses was ₹ 4,00,000.
Both partners withdrew ₹ 5,000 at the beginning of every month for the entire year.
You are required to prepare a Profit and Loss Appropriation Account for
the year ended 31st March, 2017. (ISC 2018)

Questions 10.

Vinay, Usha and Punit are partners in a firm. They have been sharing profits and losses in the ratio of 3:4:1.
Punit wants the profits to be shared equally amongst the partners. He further wants the change in profit sharing ratio to be applicable retrospectively for the last two years. Vinay and Usha have no objection to this.
The profits for the last two years were ₹ 70,000 and ₹ 50,000.
You are required to record the adjustment by means of a single journal entry. (Show the workings clearly). (ISC 2019)
ISC 12 fundamentals of partnership questions

Questions 11.

Peter, Max and Som were partners in a firm sharing profits and losses in the ratio
of 4:2:1. Their fixed capitals were ₹ 40,000, ₹ 30,000 and ₹ 30,000, respectively.
Som was guaranteed a profit of ₹ 39,000 by the firm.
It was decided that any loss arising because of the guarantee would be shared by
Peter and Max equally.
The trading profit of the firm for the year ended 31st March, 2018, was
₹ 1,47,000.
You are required to prepare the Profit and Loss Appropriation Account for
the year 2017-18, showing the distribution of profits. (ISC 2019)

ISC 12 fundamentals of partnership questions

Questions 12.

Ravi and Tiku are partners in a firm. According to their partnership deed:
(i) Interest on capital will be allowed @ 5% per annum.
(ii) Interest on drawings will be charged @ 4% per annum.
(iii) Each partner will be given a salary of ₹1,000 per month.
(iv) Partners will share profits and losses in the ratio of 2:1.
Following are the particulars of the capitals and drawings of the partners:
Ravi ₹                          Tiku ₹
Capital (1st April, 2017)                                                60,000                         50,000
Drawings (made on 1 st June, 2017)                             3,000                            6,000
Ravi had taken a loan of ₹ 10,000 from the firm on which interest of ₹ 200 was due by
him to the firm.
The accounts for the year 2017-18 showed that the firm had made a profit of ₹ 77,000
before taking into account any interest, partners’ salaries and manager’s salary of
₹ 18,000.
You are required to prepare:
(i) Profit and Loss Appropriation Account for the year 2017-18.
(ii) Partners’ Capital Accounts. (ISC 2019)

ISC 12 fundamentals of partnership questions