FUNDAMENTALS OF PARTNERSHIP

ONE SHOT
XII BOARD 2023
Meaning, Minimum, Maximum Partners & Liabilities

LLP ACT 2008

 Essential Features of Partnership
❑Two or More Partners
❑Agreement
❑Lawful Business
❑Profit- sharing
❑Mutual Agency
Partnership Deed VS Partnership Act 1932
Provisions If Deed is silent ?
Q.1) A and B are Partners with Capital 40,000 and 20,000. The firm earned a
profit of ₹30,000 during the year. A share of profit will be

a) 10,000
b) 15000
c) 18000
d) NIL
Q.2) Bose, Sarkar and Chatterjee are partners in a firm and do not have a partnership
deed. Bose introduced further capital of ₹5,00,000 on 1st October,2021. Where as
Chatterjee took a loan of ₹50,000 from the firm on 1st October,2021. Disputes have
arisen among them on the following issues:
a) Bose demands interest @10% p.a. on ₹5,00,000 being his extra capital.
b) Sarkar desires that his son Deep should be admitted as partner and he will give
him half of his share Bose and Chatterjee do not agree.
c) Bose and Sarkar are of the view that Chatterjee should be charged interest on
loan from the firm at the lending rate of the banks, which is 12% p.a.
d) Sarkar has withdrawn ₹5,000 from the firm for his personal use. Bose and
Chatterjee are of the view that Sarkar should be charged interest 10%p.a.
You are required to give solution to each issue of dispute
Format of Profit & Loss Appropriation A/c
Methods of Partner’s capital Account
If Profits are inappropriate then ?
INTEREST ON DRAWINGS (ALL CASES)
Time Factor Formula

PRODUCT METHOD
Q.3) A, B and C are partners, their partnership deed provides for interest on
drawings at 8% per annum. B withdrew a fixed amount in the middle of every
month and his interest on drawings amounted to ₹4,800 at the end of the year.
What was the amount of his monthly drawings?

(A) ₹10,000.
(B) ₹5,000.
(C) ₹1,20,000.
(D) ₹48,000.
Manager Commission
Calculation of Interest on capital & Opening Capital
Q.4) On 1st April 2021, X capital was ₹2,00,000. On 1st October 2021, he
introduced additional capital of ₹ 1,00,000 interest on capital @6% p.a. on
31st march 2022 will be
a) 9000
b) 18000
c) 10500
d) 15000
FULL FLEDGED QUESTIONS
Q.5) A and B are partners sharing profit and losses in the ratio of 3:1. on 1st
April,2021, their capitals were A ₹50,000 and B ₹30,000. During the year
ended 31st march,2022. the firm earned a net profit of ₹50,000. The terms of
partnership are:
a) Interest on capital is to be allowed @6%p.a.
b) A will get a commission @2% on turnover.
c) B will get a salary of ₹500 per month.
d) B will get commission of 5% on profits after deduction of all expenses
including such commission.
Partners’ drawings for the year were: A ₹8,000 and B ₹6,000. Turnover for the
year was ₹3,00,000.
After considering the above facts, you are required to prepare Profit and Loss
Appropriation Account and Partners capital Account.
JOURNAL ENTRIES
PAST ADJUSTMENTS
Q.6) P and Q were partners in a firm sharing profits and losses equally. Their fixed
capitals were 2,00,000 and 3,00,000 respectively. The partnership Deed Provided
for interest on capital @12%p.a. for the year ended 31st march,2016 profit of the
firm were distributed without providing interest on capital.
Pass necessary adjustment entry to rectify the error
Q.7) A, B and C were partners in a firm sharing profit and losses in the ratio of
4:3:3. their fixed capitals were 1,00,000; 2,00,000 and 3,00,000 respectively.
For the year 2020-21 interest on capital was credited to them @10% p.a.
instead of 9% p.a. which of the following entry is necessary to rectify the error?
Q.8) Mita and Usha are partners in a firm sharing profits in the ratio of 2:3. Their
capital Accounts as on 1st April,2015 showed balance of 1,40,000 and 1,20,000
respectively. The drawings of Mita and Usha during the year 2015-16 were
32,000 and 24,000 respectively. Both the amount 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 capital @6%p.a.
b) Interest on drawings @ 6%p.a.
c) Mita was entitled to a commission of 8,000 for the whole year
Showing your working clearly pass rectifying entry in the books of the firm
GUARANTEE OF PROFITS TO A PARTNER
Q.9) P,Q & R sharing profits in ratio of 3:2:1. R is guaranteed that he will get
Minimum of ₹20,000 every year. Firm earned 90,000 net profit. How much
profit P will get?
a) 45000
b) 40000
c) 42000
d) 43000
Q.10) Asgar, Chaman and Dholu are partners in a firm. Their capital account
stood at 6,00,000; 5,00,000 and 4,00,000 respectively on 1st April,2021. They
shared profits and losses in the proportion of 4:2:3. Partners are entitled to
interest on capital @ 8%p.a. and salary to chaman and Dholu @7,000 per
month and 10,000 per quarter respectively as per the provision of the
partnership deed.
Dholu’s share of profit (excluding interest on capital but including salary) is
guaranteed at a minimum of 1,10,000 p.a. Any deficiency arising on that
account shall be met by Asgar. The profit for the year ended 31st march,2022
amounted to 4,24,000.
Prepare profit and loss appropriation account for the year ended 31st
march,2022