Test On Partnership Fundamentals

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| By Chryselle Pinto

Chryselle Pinto

Community Contributor

Quizzes Created: 1 | Total Attempts: 283

Questions: 8 | Attempts: 283 | Updated: Mar 21, 2023

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This is a 20 marks test for 1 hour. Please make sure you have the following before starting the test.
1. Notebook and stationery
2. Calculator

Questions and Answers

1.

In the absence of partnership deed, state any 4 provisions that are applicable.
2.

A and B are partners in a firm sharing profits in the ratio of 3 : 2. They had advanced to the firm a sum of ₹ 30,000 as a loan in their profit-sharing ratio on 1st October, 2019. The Partnership Deed is silent on interest on loans from partners. Compute interest payable by the firm to the partners, assuming the firm closes its books every year on 31st March 2020
3.

Tina and Lina are partners sharing profits and losses in the ratio 2:3 with capitals of Rs. 4,00,000 and Rs. 8,00,000 respectively on 1^st April 2019. Each partner is entitled to 10% p.a interest on capital but before charging any commission. Tina is entitled a commission of 8% of net profit remaining after deducting interest on capital and after charging all commissions. The profit for the year ended 31^st March 2020 before IOC was Rs. 6,00,000. Prepare Profit and loss Appropriation A/c
4.

Moli, Bhola and Raj were partners in a firm sharing profits and losses in the ratio of 3: 3: 4. Their partnership deed provided for the following: (i) Interest on capital @ 5% p.a. (ii) Interest on drawing @ 12% p.a. (iii) Interest on partners’ loan @ 6% p.a. (iv) Moli was allowed an annual salary of Rs. 4,000; Bhola was allowed a commission of 10% of net profit as shown by Profit and Loss Account and Raj was guaranteed a profit of Rs.1,50,000 after making all the adjustments as provided in the partnership agreement. Their fixed capitals were Moli: Rs.5,00,000; Bhola: Rs.8,00,000 and Raj : Rs.4,00,000. On 1st April, 2018 Bhola extended a loan of Rs 1,00,000 to the firm. The net profit of the firm for the year ended 31st March, 2019 before interest on Bhola’s loan was Rs.3,06,000. Prepare Profit and Loss Appropriation Account of Moli, Bhola and Raj for the year ended 31st March, 2019 and their Current Accounts assuming that Bhola withdrew Rs 5,000 at the end of each month, Moli withdrew Rs 10,000 at the end of each quarter and Raj withdrew Rs.40, 000 at the end of each half year.
5.

Chotu withdraws Rs. 800 at the beginning of every month for the six months ending 31st Sept 2019. Hence,his interest on drawings at 15% p.a for the period of six months would be
- A.
  
  360
- B.
  
  330
- C.
  
  720
- D.
  
  210
Correct Answer
D. 210

Explanation
Chotu withdraws Rs. 800 at the beginning of every month for the six months ending 31st Sept 2019. The total amount withdrawn by Chotu over the six months would be 800 * 6 = Rs. 4800. The interest on the drawings at 15% p.a for the period of six months would be 4800 * 15/100 * 6/12 = Rs. 360. Therefore, the correct answer is 360.

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6.

X, Y and Z are partners sharing profits and losses equally. Their capital balances on March, 31,2019 are Rs.80,000, Rs.60,000 and Rs.40,000 respectively. Their personal assets are worth as follows : X — Rs.20,000, Y— Rs. 15,000 and Z— Rs. 10,000. The extent of their liability in the firm would be :
- A.
  
  X— Rs. 80,000 : Y— Rs.60,000 : and Z— Rs.40,000
- B.
  
  X— Rs.20,000 : Y— Rs.15,000 : and Z— Rs.10,000
- C.
  
  X— Rs. 1,00,000 : Y— Rs.75,000 : and Z— Rs.50,000
- D.
  
  Equal
Correct Answer
B. X— Rs.20,000 : Y— Rs.15,000 : and Z— Rs.10,000

Explanation
The extent of their liability in the firm would be X— Rs.20,000 : Y— Rs.15,000 : and Z— Rs.10,000. This is because the personal assets of each partner are subtracted from their capital balances to determine their net capital in the firm. Therefore, X's liability in the firm would be Rs.80,000 - Rs.20,000 = Rs.60,000, Y's liability would be Rs.60,000 - Rs.15,000 = Rs.45,000, and Z's liability would be Rs.40,000 - Rs.10,000 = Rs.30,000. Thus, the extent of their liability in the firm is X— Rs.20,000 : Y— Rs.15,000 : and Z— Rs.10,000.

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7.

X, Y and Z are partners in a firm. At the time of division of profit for the year there was dispute between the partners. Profit before interest on partner’s capital was Rs.6,00,000 and Z demanded minimum profit of Rs.5,00,000 as his financial position was not good. However, there was no written agreement on this point.
- A.
  
  Other partners will pay Z the minimum profit and will share the loss in capital ratio
- B.
  
  Other partners will pay Z the minimum profit and will share the loss equally.
- C.
  
  X and Y will take Rs.50,000 each and Z will take Rs.5,00,000.
- D.
  
  Rs.2,00,000 to each of the partners.
Correct Answer
D. Rs.2,00,000 to each of the partners.

Explanation
Since there was no written agreement on the minimum profit that Z should receive, the partners will divide the profit equally among themselves. Therefore, each partner (X, Y, and Z) will receive Rs.2,00,000.

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8.

P and Q were partners in a firm sharing profits and losses in the ratio 3:2.They admit R for 1/6th share in profits and guaranteed that his share will not be less than 25000.Total profit of the firm were 90,000 Calculate share of profit for each partner when guarantee is given by P.
- A.
  
  P= 35000, Q= 30,000, R= 25,000
- B.
  
  P =39000, Q = 26,000, R = 25,000
- C.
  
  P = 35000, Q = 10,000, R = 25,000
- D.
  
  P = 40000, Q = 25,000, R = 25,000
Correct Answer
A. P= 35000, Q= 30,000, R= 25,000

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Current Version
Mar 21, 2023

Quiz Edited by
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Jun 03, 2020

Quiz Created by
Chryselle Pinto

Test On Partnership Fundamentals

In the absence of partnership deed, state any 4 provisions that are applicable.

Chotu withdraws Rs. 800 at the beginning of every month for the six months ending 31st Sept 2019. Hence,his interest on drawings at 15% p.a for the period of six months would be

P and Q were partners in a firm sharing profits and losses in the ratio 3:2.They admit R for 1/6th share in profits and guaranteed that his share will not be less than 25000.Total profit of the firm were 90,000 Calculate share of profit for each partner when guarantee is given by P.