Partnership Test

Qno 1 A, B and C are partners in a firm. They do not have a Partnership Deed.
At
the end of the first year of the commencement of the firm, they have faced the
following problems :
(a) A wants that interest on capital should be allowed to the partners but B and C
do not agree.
(b) B wants that the partners should be allowed to draw a salary but A and C do
not agree.
(c) C wants that the loan given by him to the firm should bear interest @ 10% p.a.
but A and B do not agree.
(d) A and B having contributed larger amounts of capital, desire that the profits
should be divided in the ratio of their capital contribution but C does not agree.
State how you will settle these disputes if the partners approach you for purpose.
Qno 2 X and Y are partners sharing profits and losses in the ratio of 2 : 3 with
capitals ₹ 2,00,000 and ₹ 3,00,000, respectively. On 1st October, 2018, X and Y gave
loans of ₹ 80,000 and ₹ 40,000 respectively to the firm. Show distribution of
profits/losses for the year ended 31st March, 2019 in each of the following
alternative cases:
Case 1: If the profits before interest for the year amounted to ₹ 21,000.
Case 4: If the loss before interest for the year amounted to ₹ 1,400.
Qno 3 X, Y and Z are partners in a firm sharing profits in 2 : 2 : 1 ratio. The fixed
capitals of the partners were : X ₹5,00,000; Y ₹ 5,00,000 and Z ₹ 2,50,000
respectively. The Partnership Deed provides that interest on capital is to be
allowed @ 10% p.a. Z is to be allowed a salary of ₹ 2,000 per month. The profit of
the firm for the year ended 31st March, 2018 after debiting Z’s salary was ₹
4,00,000.
Prepare Profit and Loss Appropriation Account.

Qno 4 Chander and Damini were partners in a firm sharing profits and losses equally. On
31st March, 2017 their balance sheet was as follows
On 1st April, 2017, they admitted Elina as a new partner for 13rd share in the profits on the
following conditions.
(i) Elina will bring ₹ 3,00,000 as her capital and ₹ 50,000 as her share of goodwill premium,
half of which will be withdrawn by Chander and Damini.
(ii) Debtors to the extent of ₹ 5,000 were unrecorded.
(iii) Furniture will be reduced by 10% and 5% provision for bad and doubtful debts will be
created on bills receivables and debtors.
(iv) Value of land and building will be appreciated by 20%.
(v) There being a claim against the firm for damages, a liability to the extent of ₹ 8,000 will
be created for the same.
Prepare revaluation account and partners’ capital accounts,
Qno 5 Abha and Bimal are partners in a firm sharing profits and losses in the ratio of 3 : 2.
On 31st March, 2015 they admitted Chintu into partnership for 1/5th share in the profits of
the firm. On that date their balance sheet stood as under
Chintu was admitted on the following terms

(i) He will bring ₹ 80,000 as capital and ₹ 30,000 for his share of goodwill premium.
(ii) Partners will share future profits in the ratio of 5 : 3 : 2.
(iii) Profit on revaluation of assets and reassessment of liabilities was ₹ 7,000.
(iv) After making adjustments, the capital accounts of the partners will be in proportion to
Chintu’s capital. Balance to be paid off or brought in by the old partners by cheque as the
case may be.
Prepare the capital accounts of the partners and bank account.
Qno 6 Akul, Bakul and Chandan were partners in a firm sharing profits in the ratio of 2 : 2 : 1.
On 31st March, 2018 their balance sheet was as follows
Balance Sheet of Akul, Bakul and Chandan
Bakul retired on the above date and it was agreed that
(i) Plant and Machinery was undervalued by 10%.
(ii) Provision for doubtful debts was to be increased to 15% on debtors.
(iii) Furniture was to be decreased to ₹ 87,000.
(iv) Goodwill of the firm was valued at ₹ 3,00,000 and Bakul’s share was to be adjusted
through the capital accounts of Akul and Chandan.
(v) Capital of the new firm was to be in the new profit sharing ratio of the continuing
partners.
Prepare revaluation account, partners’ capital accounts and balance sheet of the
reconstituted firm
Qno 7 Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 :
2. On 31st March, 2018 their balance sheet was as follows
On the above date, they decided to dissolve the firm.

(i) Ashish agreed to take over funriture at ₹ 38,000 and pay-off Mrs Ashish’s loan.
(ii) Debtors realised ₹ 18,500 and plant realised 10% more.
(iii) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was
sold at a gain of 10%.
(iv) Trade creditors took over investments in full settlement.
(v) Kanav agreed to take over the responsibility of completing dissolution at an agreed
remuneration of ₹ 12,000 and to bear realisation expenses. Actual expenses of realisation
amounted to ₹ 8,000.
Prepare realisation account

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Qno 1 A, B and C are partners in a firm. They do not have a Partnership Deed.

Prepare Profit and Loss Appropriation Account.

Chintu was admitted on the following terms

On the above date, they decided to dissolve the firm.

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