CBSE Important Questions

CBSE Guess > Papers > Important Questions > Class XII > 2012 > Accounting > Accounting By Mr. Gulshan Hans

CBSE CLASS XII

  1. Amit and Vijay started a partnership business on 1st April, Rs. 2010. Their capital contributions were Rs. 2,00,000 and Rs. 1,50,000 respectively. The partnership deed provided inter alia that:

    (a) Interest on capital @ 10% p.a.
    (b) Amit to get a salary of Rs. 2,000 per month and Vijay Rs. 3,000 per month.
    (c) Profits are to be shared in the ratio of 3:2.

    The profits for the year ended 31st March, 2011 before making above appropriations were Rs. 2,16,000. Interest on drawings amounted to Rs. 2,200 for Amit and Rs. 2,500 for Vijay.

    Prepare Profit and Loss Appropriation A/c.

    Ans. Divisible profit Rs. 1,25,700

  2. A, B and C were partners in a firm having capitals of Rs. 50,000; Rs. 50,000 and Rs. 1,00,000 respectively. Their current account balances were A: Rs. 10,000 B: Rs. 5,000 and C: Rs. 2,000 (Dr.). According to the partnership deed the partners were entitled to an interest on capital @ 10% p.a. C being the working partner was also entitled to a salary of Rs. 12,000 p.a. The profits were to be shared as:

    (a) The first Rs. 20,000 in the proportion to their capitals.
    (b) Next Rs. 30,000 in the ratio of 5:3:2.
    (c) Remaining profits to be shared equally.

    The firm made a profit of Rs. 1,72,000 before charging any of the above items. Prepare the profits and loss appropriation account and pass the necessary Journal entry for the appropriation of profits.

    Ans. Share in divisible profit A: Rs. 50,000 B: Rs. 44,000 and C: Rs. 46,000

  3. X and Y are partners sharing profits in proportion of 3:2 with capitals of 80,000 and Rs. 60,000 respectively. Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of Rs. 6,000 which has not been withdrawn. During 2009-2010 the profits for the year prior to calculation of interest on capital but after charging Y’s Salary amounted to 24,000. A provision of 5% of the profit is to be made in respect of commission to the manager. Prepare an account showing the allocation of profits.

    Note: Manager Commission is a charge against the profit. Hence, it must be provided before making any appropriation (such as salary, interest on capital).

    Ans. Share in D.P.; X:Rs. 9,300 and Y Rs. 6,200

  4. A and B formed a partnership on 1st April, 2009. They agreed that out of profits:

    (a) A should receive a salary of 500 per month.
    (b) Interest on capital should be allowed @ 6% p.a. and
    (c) Remaining profits be divided equally.

    A contributed a capital or 50,000 on 1st April, 2009 but B brought in his capital of 1,00,000 on 1st July 2009. During the year, the drawings were A Rs. 15,000 and B Rs. 20,000. Profits for the year ended 31st March, 2010 before the above noted salary and interest were Rs. 50,000. Prepare the profit and loss appropriation account and the capital accounts of the partners. [Ans.: Capital A/c; A Rs. 62,250; B Rs. 1,02,750

  5. Mohan, Vijay and Anil are partners, the balance of their capital accounts being Rs. 30,000; Rs. 25,000 and Rs. Rs. 20,000 respectively. In arriving at these figures, the profits for the year ended 31st March, 2010, Rs. 24,000 had already been credited to partners in the proportion in which they shared profits. Their drawings were Rs. 5,000; Rs. 4,000 and Rs. 3,000 respectively during the year. Subsequently, the following omissions were noticed and it was decided to bring them into account:

    (a) Interest on capital @ 10% p.a.
    (b) Interest on drawings: Mohan Rs. 250, Vijay Rs. 200 and Anil Rs. 150.
    Make the necessary corrections through a journal entry and show your workings clearly.

    Ans.: Dr. Anil by Rs. 550 and credit Mohan by Rs. 550

  6. Ram, Mohan and Sohan sharing profits and losses equally have capitals Rs. 1,20,000; Rs. 90,000 and Rs. 60,000. For the year 2009, interest was credited to them @ 6% instead of 5%. Give the adjusting journal entry.

    Ans.: Debit Ram and Credit Sohan by Rs. 300

  7. Ram, Shyam and Mohan were partners in a firm sharing profits and losses in the ratio of 2:1:2. Their capitals were fixed at Rs. 3,00,000; Rs. 1,00,000 and Rs. 2,00,000 respectively. For the year 2009, interest on capital was credited to them @ 9% instead of 10% p.a. The profits for the year before charging interest was Rs. 2,50,000. Show your working notes clearly and pass the necessary adjustment entry.

    Ans.: Dr. Shyam’s Current A/c by 200; Mohan A/c Rs. 400 and Cr. Sohan’s current A/c 600

  8. A, B and C were partners in a firm. On 1st January, 2009, their capitals stood at Rs. 50,000; Rs. 25,000 and Rs. 25,000 respectively. As per the provisions of the partnership deed:

    (a) C was entitled for a salary of Rs. 1,500 per month.
    (b) Partners were entitled to interest on capital @ 5% p.a.
    (c) Profits were to be shared in the ratio of capitals.

    The net profit for the year 2009 of Rs. 45,000 was divided equally without providing for the above terms. Pass an adjustment entry to rectify the above error.

    Ans.: A’s cap. Dr. Rs. 1,500; B’s cap. Dr. Rs. 8,250 and C’s cap. Cr.Rs. 9,750]

  9. Shiv and Shanker were partners in a firm sharing profits in 3:2 ratio. Their fixed capitals were Rs. 1,70,000 and Rs. 2,10,000 respectively. The partnership deed provides the following–

  10. (a) Interest on capital @ 12% p.a.
    (b) Interest on drawings @ 18% p.a.

    Shiv withdrew Rs. 12,000 on 30th June, 2009 and Shanker withdrew Rs. 18,000 on 30th September 2009. The profit for the year ended 31st March, 2010 was Rs. 97,000, which was distributed among the partners without providing for the above adjustments. Pass the adjustment entry.

    Ans.: Dr. Shiv’s Current A/c and Cr. Shanker’s Current A/c by Rs. 6,636

  11. X and Y are partners in a firm. Their respective capital contributions are Rs. 3,00,000 and Rs. 1,50,000 and their profit sharing ratio is 3:2. Immediately after the allocation of Rs. 75,000 as profit for the year ended 31st March, 2010, it was discovered that in arriving at the profit for 2009-10, the following two items have been ignored:

    (a) Outstanding expenses of Rs. 7,000 and
    (b) Accrued interest on investment of Rs. 4,000.

    Pass an adjusting journal entry.
    Hint: Accrued Interest A/c Dr. Rs. 4,000
    X’s Capital A/c Dr. Rs. 1,800
    Y’s Capital A/c Dr. Rs. 1,200
    To Outstanding Expenses A/c Rs. 7,000

  12. A, B and C were in partnership sharing profits and losses in the ratio of 4:2:1 respectively. It was provided that in no case C’s share in profits should be less than 7,500. The profits for the year 2009 amount to 31,500. You are required to show the appropriation among the partners

    Ans.: Share in D.P.: A Rs. 16,000; B Rs. 8,000 and C Rs. 7,500]

  13. A, B and C are partners in a firm. Their profit sharing ratio is 2:2:1. However, C is guaranteed a minimum amount of Rs. 10,000 as share of profits every year. Any deficiency arising on that amount shall be met by B. The profits for the two years ended 31st March, 2009 and 31st March, 2010 were Rs. 40,000 and Rs. 60,000 respectively. Prepare the profit and loss appropriation account for the two years.

    Deficiency to be borne by B - 2009,Rs. 2,000; 2010, NIL

  14. A, B and C are partners sharing profits in the ratio of 5:4:1. C is given a guarantee that his minimum share of profits in any given year would be Rs. 5,000. Deficiency, if any, would be borne by A and B equally. The profits for the year 2008-09 amounted to Rs. 40,000. Pass the necessary entries in the books of the firm.

    (i) Profit and Loss A/c Dr. Rs. 40,000
    To Profit and Loss Appropriation A/c Rs. 40,000

    Hint:(ii) Profit and Loss Appropriation A/c Dr. Rs. 40,000
    To A’s Capital A/c Rs. 20,000
    To B’s Capital A/c Rs. 16,000
    To C’s Capital A/c Rs. 4,000

    (iii) A’s Capital A/c Dr. Rs. 500
    B’s Capital A/c Dr. Rs. 500
    To C’s Capital A/c Rs. 1,000

  15. A, B and C are in partnership sharing profits and losses in the ratio of 3:2:1 subject to the following –

    (a) C’s share of profits guaranteed to be not less than Rs. 15,000 p.a.
    (b) B given a guarantee to the effect that gross fee earned by him for the firm shall be equal to his average gross fee of the preceeding five years, which on an average works out at Rs. 25,000.

    The profits for the first year of the partnership are 75,000. The gross fee earned by B for the firm is 16,000. You are required to show the profit and loss appropriation account after giving effect to the above.

    Ans.: A’s Share Rs. 41,400; B’s Share Rs. 18,600; C’s Share Rs. 15,000]

  16. A, B and C are partners in a firm. A and B sharing profits in the ratio of 5:3 and C receiving a salary of Rs. 150 per month, plus a commission of 5% on the profits after charging such salary and commission or 1/5 the of the profits of the firm, whichever is larger. Any excess of the latter over the former is, under the partnership agreement, to be borne personally by A. The profits for the year ended 31st March, 2010 amounted to Rs. 10,710 after charging C’s salary. Prepare the Profit and Loss Appropriation Account showing the division of the profits of the firm.

    Ans.: A’s Share 6,183; B’s share 3,825; C’s Rs. 2,502

  17. The partners of a firm distributed the profits for the year ended 31st March, 2011, Rs. 90,000 in the ratio of 3:2:1 without providing for the following adjustments –

    (a) A and B were entitled to a salary of Rs. 1,500 each p.a.
    (b) B was entitled to a commission of Rs. 4,500.
    (c) B and C guaranteed a minimum profit of Rs. 35,000 p.a. to A.
    (d) Profits were to be shared in the ratio of 3:3:2.

    Pass the necessary journal entry for the above adjustments in the books of the firm.

    Ans. A’s Capital A/c Dr. Rs. 8,500
    To B’s Capital A/c Rs. 4,500
    To C’s Capital A/c Rs. 4,000

Submitted By Mr. Gulshan Hans
About author: P.G.T. Accountancy (Vidya Mandir Public School, Sector - 15A, Faridabad)
mobile no: 9910811665
Email: [email protected]