Q1. Rajiv and Sanjeev were partners in a firm.

Their partnership deed provided that the

profits shall be divided as follows :
First ` 20,000 to Rajeev and the balance in the ratio of 4 : 1. The profits for the year
ended 31st March, 2017 were ` 60,000 which had been distributed among the partners.
On 1-4-2016 their capitals were Rajeev ` 90,000 and Sanjeev ` 80,000. Interest on
capital was to be provided @ 6% p.a. While preparing the profit and loss appropriation
interest on capital was omitted.
Pass necessary rectifying entry for the same. Show your workings clearly

Mudit and Uday are partners in a firm sharing profits in the ratio 2 : 3. Their capital
accounts as on April 1, 2015 showed balances of ` 70,000 and ` 60,000 respectively.
The drawings of Mudit and Uday during the year 2015-2016 were ` 16,000 and
` 12,000 respectively. Both the amounts were withdrawn on 1st January 2016. It was
subsequently found that the following items had been omitted while preparing the final
accounts for the year ended 31st March 2016.
(a) Interest on capitals @ 6% p.a.;
(b) Interest on drawings @ 6% p.a.;
(c) Mudit was entitled to a commission of ` 4,000 for the whole year.
Showing you workings clearly pass a rectifying entry in the books of the firm.

Q1 and Q2 – 3 marks each, Q3 – 4 marks Time : 45 minutes

Q1. 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:

Ratio Year

3:2:1 31 March 2014

5:3:2 31 March 2013

You are required to give necessary adjusting entry on April 1, 2014.

Q2. X and Y are partnership sharing profits and losses in the ratio 2 : 1. They decided to admit Z, their
manager as partner giving him 1/5 th share in profit. Z while a manager, was receiving a salary of 25,000
per annum plus a commission of 10% of the net profit after charging salary and commission.

It was also agreed that any excess amount which Z receives as partner (over his salary and commission)
will be borne by X. Profit for the year 3,22,000 before payment of salary and commission. Prepare Profit
and Loss Appropriation Account.

Q3. X, Y, and Z are partners sharing profits and losses in the ratio 7 : 5 : 4. Their balance sheet as at 31 st
March, 2022 stood as follows :

Liabilities Amount Assets Amount

Capital Accounts : Sundry Assets 6,00,000
X 2,00,000
Y 1,50,000
Z 1,20,000 4,70,000
General Reserve 75,000
Profit and Loss A/c 15,000
Creditors 40,000
6,00,000 6,00,000
st
Partners decided that with effect from (w.e.f.) 1 April, 2022, they will share profits and losses in the ratio
3 : 2 : 1. For this reason goodwill of the firm was valued at 1,50,000. The partners do not want to record
the goodwill and also do not want to distribute the general reserve and profits.

Pass the necessary journal entry and prepare new balance sheet.