Chhaya Public School

Class 12th
Subject – Accountancy

Time 1.30 MM 50

Note :- Two Mark will be allotted for good hand writing.

35. State the provisions of partnership Act, 1932, in the absence of a partnership deed
on Partner’s Drawings, and (ii) Interest on Advances other than capital.
36. Can a partner be exempted for sharing losses in a firm? If yes, under what
circumstances? (Hint: yes, if partners have agreed that one or more of them shall not be
liable for losses.)
37. A and B are partners in a firm without a partnership Deed. A is an active partner and
claims a salary of Rs. 18,000 per month. State with reason whether the claim is valid or not.
38. Somesh and Ramesh are partners in a firm with capitals of Rs. 3,00,000 and Rs. 4,00,000
respectively. They do not have a Partnership Deed. Ramesh wants to share the profits in the
ratio of capitals. State with reasons whether the claim is valid.
39. Chander and Suman are partners in a firm without a Partnership Deed. Chander’s
capital is Rs. 10,000 and Suman’s capital is Rs. 14,000. Chander has advanced a loan of Rs.
5,000 and claims interest @ 12% p.a. on it. State with reasons whether his claim is valid or
not.
57. When the partners’ capitals are fixed, where will the drawings made by a partner be
recorded?
58. If the partners’ capitals are fixed, where will you record interest charged on drawings?
59. Name the method of calculating interest on Drawings of the partner if different
amounts are withdrawn on different dates.
SHORT ANSWER TYPE QUESTIONS
1. Mention the items that may appear on the credit side of the Capital Account of a Partner
when the capitals are fluctuating.
2. Mention the items that may appear on the credit side of the Capital Account of a Partner
when the capitals are fluctuating.
3. List any four items appearing on the Profit and Loss Appropriation Account.
4. State any four features of a Partnership.
5. List any four contents of a Partnership Deed.
6. Discuss the main provisions of the Indian Partnership Act, 1932 that are relevant to
partnership accounts if there is no Partnership Deed.
7. Distinguish between Fixed and Fluctuating Capitals.
8. State the two situations in which interest on Partners’ Capital is generally provided.
76. X and Y are partners sharing profits and losses in the ratio of 3:2.They employed Z as
their Manager to whom they paid a salary of Rs. 7,500 per month. Z had deposited Rs.
2,00,000 on which interest was payable @ 9% p.a. At the end off the accounting year (i.e.,
31st March, 2018) 2017-18 (after division of the year’s profits), it was decided that Z should
be treated as a partner with effect from 1st April, 2014 with 1/6th share of profits, his
deposit being considered as capital carrying interest @ 6% p.a. like capitals of other
partners. The firm’s profits and losses after allowing interest on capitals were – 2014-15:
23. The average profit earned by a firm is Rs. 1,00,000 which includes undervaluation of
stock of Rs. 40,000 on an average basis. The capital invested in the business is Rs. 6,30,000
and the normal rate of return is 5% Calculate goodwill of the firm on the basis of 5 times
the super profit.
SUPER PROFIT METHOD WHEN PAST ADJUSTMENTS ARE MADE
24. The average profit earned by a firm is Rs. 7,50,000 which includes overvaluation of stock
of Rs. 30,000 on an average basis. The capital invested in the business is Rs. 42,00,000 and
the normal rate of return is 15% Calculate goodwill of the firm on the basis of 3 times the
super profit.
25. Ayub and Amit are partners in a firm and they admit Jaspal into partnership w.e.f. 1st
April 2018. They agreed to value goodwill at 3 years’ purchase of Super Profit Method for
which they decided to average profit of last 5 years. The profits for the last 5 years were:
Year Ended Net Profit (Rs.)
31st March, 2014 1,50,000
31st March, 2015 1,80,000
31st March, 2016 1,00,000 (Including abnormal loss of Rs. 1,00,000)
31st March, 2017 2,60,000 (Including abnormal gain (Profit) of Rs.
40,000)
31st March, 2018 2,40,000
The firm has total assets of Rs. 20,00,000 and Outside Liabilities of Rs. 5,00,000 as on that
date. Normal Rate of Return in similar business is 10%
Bhavya and Naman were partners in a firm carrying on a tiffin service in Hyderabad. Bhavya
noticed that a lot of food is left at the end of the day. To avoid wastage she suggested that
it be distributed to the needy; Naman wanted that it should be mixed with the food being
served the next day. Naman then gave a proposal that if his share in the profit is increased,
he will not mind free distribution of leftover food. Bhavya happily agreed. So, they decided
to change their profit-sharing ratio to 1:2 with immediate effect. On that into a gain of Rs.
18,000. On that date the good will of the firm was valued at Rs. 1,20,000.
(a) Pass necessary Journal entries for the above in the books of the firm.
(b) State any two values highlighted in the above para.
Q 7 what do you mean by the term adjustment of capital. and what are the circumstances
where it is required at the time of admission of a partner ?