CBSE Test Paper 02

Ch-2 Fundamentals of partnership and Goodwill

1. If dates of the withdrawal of drawings are not given then interest on drawings should
be charged:
a. For 0 months
b. For 6 months
c. For 12months
d. For 8 months
2. Calculate the average profit of last four year's profits. The profits of the last four years
were:
2008 27000
2009 39000
2010 16000(loss)
2011 40000
a. ₹10000
b. Rs. 22500
c. ₹30000
d. ₹40000
3. A, B and C are partners sharing profits equally. A and B has given a minimum
gurantee of Rs. 8,000 to the C. How much amount of profit C will get, when profit of
the firm is Rs.30,000.
a. 22,000
b. 10,000
c. 30,000
d. 8,000
4. Salary paid to a partner will be shown in:
a. Partners current account only
b. Profit and loss appropriation account
c. Profit and loss account
d. Partners capital account only
5. When rate of Interest on Drawings is given without the word per annum, interest will
be calculated _____

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 a. For 12 month
b. Irrespective of a time period
c. For 6 month
d. For 1 month

6. In the absence of provision in the partnership deed, in which ratio is the deficiency
arising out of guarantee of profit to a partner borne by the other partners?

7. Following is the extract of the Balance Sheet of, Neelkant and Mahadev as on March
31, 2017:

Balance Sheet as at March 31, 2017

Amount Amount
Liabilities Assets
Rs Rs

Neelkant’s Capital 10,00,000 Sundry Assets 30,00,000

Mahadev’s Capital 10,00,000

Neelkant’s Current Account 1,00,000

Mahadev’s Current Account 1,00,000

Profit and Loss Appropriation

(March 2017) 8,00,000

30,00,000 30,00,000

During the year Mahadev’s drawings were Rs 30,000. Profits during 2017 is Rs
10,00,000. Calculate interest on capital @ 5% p.a for the year ending March 31, 2017.

8. Ritesh and Hitesh are childhood friends. Ritesh is a consultant whereas Hitesh is an
architect. They contributed equal amounts and purchased a building for Rs.2 crores.
After a year, they sold it for Rs.3 crores and shared the profits equally. Are they doing
the business in a partnership? Give reason in support of your answer.

9. State the provisions of Indian Partnership Act, 1932 regarding the payment of
remuneration to a partner for the services rendered.

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10. P and Q are partners from 1st January, 1998 without any partnership agreement and
they introduced capital of Rs. 40,000 and Rs. 20,000 respectively. On 1st July, 1998, P
advances Rs. 10,000 by way of loan to the firm without any agreement as to interest.
The Profit &, Loss Account for the year 1998 disclosed a profit of Rs.14,250; but the
partners cannot agree upon the question of interest and upon the basis of division of
profits. You are required to divide the profit between them giving reasons for your
method.

11. A, B and C were partners in a firm. On 1st April, 2008, their fixed capitals stood at Rs
50,000, Rs 25,000 and Rs 25,000 respectively. As per the provisions of the partnership
deed

i. B was entitled for a salary of Rs 5,000 per annum.

ii. All the partners were entitled to interest on capital at 5% per annum.
iii. Profits were to be shared in the ratio of capitals.

The net profit for the year ending 31st March 2009 of Rs33,000 and 31st March, 2010
of Rs45,000 was divided equally without providing for the above terms. Pass an
adjustment journal entry to rectify the above error.

12. A and B entered into partnership on 1st April, 2009 without any partnership deed.
They introduced capital of Rs 5,00,000 and Rs 3,00,000 respectively. On 31st October,
2009, A advanced Rs 2,00,000 by way of loan to the firm without any agreement as to
interest. The profit and loss account for the year ended 31st March, 2010 showed a
profit of Rs 4,30,000, but the partners could not agree upon the amount of interest on
loan to be charged and the basis of division of profits.
Pass a journal entry for the distribution of the profit between the partners and
prepare the capital accounts of both the partners and loan account of ‘A'.

13. Anju, Manju and Mamta are partners whose fixed capitals were Rs 10,000, Rs 8,000
and Rs 6,000, respectively. As per the partnership agreement, there is a provision for
allowing interest on capitals @ 5% p.a. but entries for the same have not been made
for the last three years. The profit-sharing ratio during 2014 (4:3:5), 2015 (3:2:1) and
2016 (1:1:1). Make necessary and adjustment entry at the beginning of the fourth year
i.e. Jan. 2017.

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14. S and P are partners in a firm sharing profits and losses equally. On 1st April, 2011,
the capital of the partners were, S Rs 20,000 and P Rs 16,000. The profit and loss
account of the firm showed a net profit of 37,500 (before interest on P’s loan) for the
year ended 31st March, 2012. Considering the following information, prepare the
profit and loss appropriation account of the firm and the partners’ capital account.

i. Interest on capital to be allowed @ 6% p.a.

ii. Interest on P’s loan account of Rs 10,000 for the whole year.
iii. Interest on drawings of partners @ 6% p.a. Drawings being S Rs 4,000 and P Rs
3,000.
iv. Transfer 10% of the distributable profits of the reserve.

15. Kajol and Sunny were partners sharing profits and losses in the ratio of 3:2. The
following Balances were extracted from the books of account for the year ended
March 31, 2015.

Debit Amount Credit Amount

Particulars
Rs Rs

Capital: .

Kajol 1,15,000

Sunny 91,000

Current accounts [on 1-04-2005*]

Kajol 4,500

Sunny 3,200

Drawings

Kajol 6,000

Sunny 3,000

Opening stock 22,700

Purchases and Sales 1,65,000 2,35,800

Freight inward 1,200

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Returns 2,000 3,200

Printing and Stationery 900

Wages 5,500

Bills receivables and Bills Payables 25,000 21,000

Discount 400 800

Salaries 6,000

Rent 7,200

Insurance premium 2,000

Traveling expenses 700

Sundry expenses 1,100

Commission 1,600

Debtors and Creditors 74,000 78,000

Building 85,000

Plant and Machinery 70,000

Motor car 60,000

Furniture and Fixtures 15,000

Bad debts 1,500

Provision for doubtful debts 2,200

Loan 25,000

Legal expenses 300

Audit fee 900

Cash in hand 7,500

Cash at bank 12,000

5,78,100 5,78,100

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 Prepare final accounts for the year ended March 31, 2015, with the following
adjustments:

i. Stock on March 31, 2015, was Rs 37,500.

ii. Bad debts Rs 3,000; Provision for bad debts is to be made at 5% on debtors
iii. Rent Prepaid was Rs 1,200.
iv. Wages outstanding were Rs 2,200.
v. Interest on capital to be allowed on capital at 6% per annum and interest on
drawings to be charged @ 5% per annum.
vi. Kajol is entitled to a Salary of Rs 1,500 per annum.
vii. Prepaid insurance was Rs 500.
viii. Depreciation was charged on Building, @ 4%; Plant and Machinery, @ 5%; Motor
car, @ 10% and furniture and fixture, @ 5%.
ix. Goods worth Rs 7,000 were destroyed by fire on January 20, 2015. The Insurance
company agreed to pay Rs 5,000 in full settlement of the claim.

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