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Accountancy XII

Answer all questions.

1. Why profit and loss appropriation a/c is prepared?

2. How will you calculate interest on drawings when a partner withdraws same amount at the beginning of each quarter? 3. State the rules applicable in the absence of partnership deed relating to accounting ?

4.What is good will ? State the factors affecting good will ? 5. X, y and z were partners in a firm in the ratio of 3:2:1. They admit M as a new partner. X surrendered 1/3 of his share in favour of M. Y surrendered ¼ of his share in favour of M and Z surrendered 1/5 of his share in favour of M. Calculate new profit share in ratio.

6. The partners of a firm distributed the profits for year ended 31st march 2013, Rs. 90000 in the ratio of 3:2:1 without providing the following adjustment:

• A and B were entitled to a salary of Rs. 1500 each per annum.

• B was entitled to a commission of Rs. 4500.

• B and C had guaranteed a minimum profit of Rs. 35000 p.a to A .

• Profits were to be shared in the ratio of 3:3:2.

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

7. L ,M and N are partners in a firm sharing profit in ratio of 3:4:5. There fixed capitals were Rs. 400000, Rs.500000 and Rs. 600000 respectively. Their partnership deed provides for the following :

• Interest on capital @ 6% p.a .

• Salary of Rs. 30,000 p.a to N.

• Interest on partners drawings @ 12% p.a .

During the year ended 31st dec 2012 the firm earned a profit of Rs. 270000. L withdrew Rs. 10000

on 1.4.2012 M withdrew Rs. 12000 on 30.9.2012 and N withdrew Rs. 15000 on 31.3.2012.

Prepare profit and loss appropriation account and current a/c of the partners . 8) P and M were partners sharing profits in the ratio of 2:1. The partnership deed provided that P was to be paid a salary of Rs.4,000 per month and M was to get a commission of Ra.20,000 per year. Interest on capital was to be allowed @ 8% p.a. and interest on drawings was to be charged @ 10% p.a. Drawings of partners were, P Rs.50,000 ad M Rs.40,000 on which interest is calculated to be Rs.1,250 and Rs.750 respectively. The capital of the partners at the beginning of the year were P Rs. 3,00,000 and M Rs.2,00,000. Prepare profit and loss appropriation account and capital accounts of the partners assuming that profit for the year amounted to Rs.2,90,000.

9) Geetha and Sudha are partners sharing profits in the ratio of 3 : 1 with their capital balances on 1st jan. 2011 as Rs.4,00,000 and Rs.3,00,000 respectively. Interest on capital is allowed at 10% p a . B is allowed an annual salary of Rs.30,000. Which he has not withdrawn. During the year 2011 the profit prior to calculation of interest on capital and B’s salary amounted to Rs.1,00,000. A provision of 10% is to be made in respect of manager’s commission on the profit. Prepare account showing allocation of profit.

10)A ,S and R are partners in the ratio of 2:1:1. Their capitals on 1st April,2003 were Rs.4,00,000, Rs 3,00,000 and Rs.2,00,000 respectively Interest on capital and drawings@ 8% p.a. is to be credited and debited. S is entitled to a salary of Rs.20,000 p.a. R is to get a commission of 10% on net profit before charging such commission. The firm had a net profit of Rs.69,400 before charging interest on capital salary and commission. A,S and R withdrew Rs.8,000,Rs.8,000 and Rs.4,000 on which interest amounted to Rs.200, Rs200 and Rs 100 respectively. Prepare profit and loss appropriation account and capital accounts of the partners.

11) M, N and O were partners with capitals of Rs.40,000 Rs.30,000 and Rs.20,000. Their drawings during the year were Rs. 3,000 Rs 2,500 and Rs.1,500 respectively. Partnership deed provides that

• Interest on capital is to be allowed at 10% p.a.

• Interest on drawings to be charged @ 12% p.a.

• M is to get a monthly salary of Rs.5,00

• O is to get a commission of 10% of the net profit after charging such commission.

During the year the firm made a profit of Rs.25,800 before making above adjustments,

Interest on drawings were calculated Rs.80,Rs.70 and Rs.50 respectively for M,N and O

12)P,Q and R are partners sharing profits and losses in the ratio of 3:1:1. However, Q was given a minimum guaranteed profit of Rs. 20,00 every year. The profits for the year 2011 amounted to Rs. 60,000. Prepare profit and loss appropriation account showing distribution of profits in the following cases

• Any deficiency will be borne by P

• Any deficiency will be borne by R

• Any deficiency will be borne by P and Q in the ratio of 3:2

• Any deficiency will be borne by P and Q equally

• 13) A B and C are partners sharing profits in the ratio of 2:1:1. At the time of admission of c it was agreed that his share of profit in any year shall not be less than Rs.15,000. At the end of 2012, the profit and loss account showed a credit balance of Rs.48,000. Show profit and loss appropriation account for the year 2012.

• 14)B and C are partners in a firm sharing profits in the ratio of 3:1 . They admitted D into partnership for 1/5 th share in future profits of the business, Calculate New profit sharing ratio among B C and D and sacrificing ratio

• 15) G and T are partners in a firm sharing profits in the ratio of 2:1 . They admitted S into partnership for 1/3 th share in future profits of the business, Calculate New profit sharing ratio among B C and D and sacrificing ratio

• 16)Siva and Guru are partners in a firm sharing profits in the ratio of 3:2 . They admitted Binu into partnership for 1/4th share in future profits of the business, Calculate New profit sharing ratio and sacrificing ratio

• 17) Siva and Guru are partners in a firm sharing profits in the ratio of 3:2 . They admitted Binu into partnership . Siva sacrificed ¼ of his share and Guru sacrificed 1/6 of his share in favour of Binu. Calculate New profit sharing ratio and sacrificing ratio

• 18)Mini and Sini are partners in a firm sharing profits in the ratio of 5:3. They admitted Lini into partnership. Mini surrenders 1/5 of her share and Sini surrenders 1/6 of her share in favour of Lini. Calculate New profit sharing ratio and sacrificing ratio

• 19) Siva and Guru are partners in a firm sharing profits in the ratio of 3:2 . They admitted Binu into partnership for 1/4th.share in future profits of the business, Which he acquires from Siva and Guru in the ratio of 2:1.Calculate New profit sharing ratio and sacrificing ratio

• 20) Siva and Guru are partners in a firm sharing profits in the ratio of 3:2 . They admitted Binu into partnership ,Siva sacrifices 1/5 from his share and Guru sacrifices 1/10 from his share of profit. Calculate New profit sharing ratio and sacrificing ratio

• 21)Siva and Guru are partners in a firm sharing profits in the ratio of 3:1 . They admitted Binu into partnership ,Siva sacrifices ¼ from his share and Guru sacrifices 1/6 from his share of profit Calculate New profit sharing ratio and sacrificing ratio

• 22) Siva and Guru are partners in a firm sharing profits in the ratio of 3:2 . They admitted Binu into partnership for 1/6th share in future profits of the business, Which he acquires from Siva and Guru equally. Calculate New profit sharing ratio and sacrificing ratio

• 23) Siva ,Divya and Guru are partners in a firm sharing profits in the ratio of 3:2:1 . They admitted Binu into partnership for 1/5th share in future profits of the business, Divya retained her old share of profit in the new business Calculate New profit sharing ratio and sacrificing ratio

• 24) Calculate the value of goodwill on the basis of 2 years purchase of average profits last 5 years

1st year Rs 4,000 ( including an abnormal gain of Rs.1,000)

2nd year Rs.8,000 (excluding Rs.2,000 as insurance

premium)

3rd year Rs.2,000 (after charging loss of goods fire for

Rs.1,000)

4th year Rs.3,000

5th year Rs.1,000 (loss)

• 25) Calculate the value of good will on the basis of 4 years purchase of average profits of last 3 years. Profits for the last 3 years were; 2009 –Rs.60,000, 2010 – Rs 50,000, 2011 – Rs.70,000.

• 26) A firm earned a average profits of Rs. 50,000 every years. The total assets of the business( including cash of Rs. 10,000) amounted to Rs. 2,40,000. Its outside liabilities amounted to Rs. 20,000. The normal rate of return in the similar type of business is Rs.15%. Calculate values of goodwill

• On the basis of 5 years purchase of super profits

• On the basis of capitalisation of super profits

• On the basis o capitalisation of average profits

• 27) P,Q and R are partners with Fixed capital balances of Rs.2,00,000,Rs.1,50,000 and Rs.1,00,000 respectively. According to partnership deed the partners are entitled for

the following

i) Interest on capital @10% p.a.

ii) P and Q are entitled for a salary of Rs.2,000 each

per month.

iii) Profits are to be shared in the ratio of 4:3:2.

iv) Q is entitled to get a guaranteed minimum profit of

Rs.12,000 annually.

Profits for the year ended 31st Dec. 2007 were Rs.1,20,000

(before interest on capital and salary)

• 28) A and B were partners in a firm sharing profits and losses in the ratio of 3:2. They admitted C into partnership for 1/5 share in profits of the business. He brought Rs. 1,50,000 as his share of capital and goodwill. Good will of the firm was valued at Rs. 1,50,000. Pass necessary journal entries on admission of C showing your workings clearly.

• 29) Ram and Shyam were partners in a firm sharing profits in the ratio of 7:5. Their fixed

capitals were Rs.10,00,000 and Rs. 7,00,000 respectively. The partnership deed provided for the following:

• Interest on capital @12% p.a.

• Ram’s salary Rs. 6000 per month and Shyam’s salary Rs.60000 per year.

• Interest on drawing Ram Rs.350 and Shyam Rs 250.

The profit for the year ended 31.12.2010 was Rs. 5,03,400 which was distributed equally without providing for the above. Pass necessary adjustment entry. Show your workings clearly.

• 30) P,Q and R are in a firm profits and losses in the ratio of 5:3:2 . Their capitals (fixed) are Rs. are 4,00,000 Rs. 3,00,000 and Rs. 2,50,000 respectively. For the year 2005 interest on capital was credited to them @9% instead of 12% . Give journal entry to rectify the above.

• 31) A and B are partners sharing profits in the ratio of 4:3. C is admitted for 1/5th share. A and B decided to share equally in future. Calculate the new ratio and sacrificing ratio.

• 32) X,Y and Z are partners in a firm who share profits in the ratio 2:1:1. After closing the accounts of the firm on 31st December,2002,it was found that the undermentioned transactions as provided in the partnership deed were not passed through the books of accounts

• interest @10 p.a. on partner’s capitals of Rs.60,000,Rs.40,000 and Rs.50,000

• interest on drawings X-Rs.1,000.Y Rs.1,000 and Z.Rs.2,000

• salary of Rs. 6,000 to X and commission Rs.7,000 to Y

• 33) X and Y are partners sharing profits in the ratio of 3:2. they admist Z as anew partner . Z pays a premium of Rs. 3.000 for 1/5th share of profits ,which he acquire from X and Y in equal proportion ,Goodwill appears in the books at Rs.5.000. Give necessary journal entries

• 34)P & Q are partners in the ratio of 3:2 . They admit R into partnership for ¼ th share in the future profits with a guaranteed minimum profit of Rs. 8,000 every year. Profit for the year after admission of R amounted to Rs.25.000. Show profit and loss appropriation account.

• 35) X and Y are partners in the ratio of 4:3.They admitted Z into partnership for 1/5th

Share in profits. He brings Rs. 42,000 towards capital and his share of Goodwill . The Goodwill of the firm was valued at Rs.35000.Pass necessary journal entries

• 36) X and Y are partners sharing profits in the ratio of 3:2 on 1/1/2004.They admitted Z into Partnership for 1/5th share in future profits. However ,he has been given a guaranteed minimum profit of Rs.6000 every year. The profits for 2004 and 2005 were Rs.25000 and Rs.40000 respectively. Prepare profit and loss appropriation account for the two years.

• 37) Ram,Rahim and Vahim are partners in a firm sharing profits in the ratio of 3:2:1. Their capitals were, Rs.2,00,000 Rs.2,00,000 and Rs.1,50,000 respectively. After the preparation of final accounts for the year 2005,it is found that interest on capital had been provided @9% p.a. instead of 12% ..give an adjusting journal entry to rectify the above. Show your workings clearly.

 

Mr R. John, PGT (Comm.)


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