Partner's Capital Accounts

Q.

A & B are partners. The net divisible profit as per profit & loss appropriation account is Rs 2, 50, 000. The total interest on partners drawings is Rs 4, 000. A's salary is Rs 4, 000 per quarter & B`s salary is Rs 40, 000 per annum. Calculate the net profit/ loss for the year.

1. Rs 2, 66, 000

2. Rs 4, 02, 000

3. Rs 3, 06, 000

4. Rs 3, 02, 000

Q.

A withdrew Rs 4, 000 in the end of every month for 6 months. What shall be the interest on drawings at the rate of 5% p.a?

1. Rs 350

2. Rs 600

3. Rs 420

4. Rs 250

Q.

A withdrew Rs. 4, 000 in the beginning of every month for 6 months. What shall be the interest on drawings at the rate of 5% p.a?

1. Rs 420

2. Rs 600

3. Rs 240

4. Rs 350

Q.

Calculate Debt Equity Ratio from the following information:

$\begin{array}{cc}& \text{Rs.}\\ \text{Equity Share Capital}& 3,00,000\\ \text{Preference Share Capital}& 1,00,000\\ \text{General Reserve}& 1,30,000\\ \text{Securities Premium}& 40,000\\ \text{Profit \& Loss Balance}& 70,000\\ \text{10 \% Debentures}& 4,50,000\\ \text{Loan from Bank}& 3,50,000\\ \text{Current Liabilities}& 20,000\end{array}$

Q.

What does$10$ percent per annum mean?

Q.

What does 12% per annum mean?

Q. A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1 respectively. A is entitled to a commission of 10% on the net profit. Net profit for the year is ₹ 1, 10, 000.
Determine the amount of commission payable to A.

Q.

Under ___ method , the capital account always shows a credit balance.

1. Fluctuating capital account

2. Floating capital account

3. Current account

4. Fixed capital account

Q.

Calculate Cash Flow from Investing Activities from the following information:
$$\begin{array}{ccc}\text{Particulars}& \text{31st March,}& \text{31st March,}\\ & 2015& 2014\\ \text{Investment in shares of Miko. Ltd.}& 18,00,000& 8,00,000\\ 12\%\text{Long Term Investments}& 1,50,000& 5,00,000\\ \text{Plant and Machinery}& 6,00,000& 4,00,000\\ \text{Goodwill}& 1,20,000& 40,000\end{array}$$
Additional Information:

(i) 9% dividend was received from Miko Ltd.
(ii) A machine costing Rs. 50, 000 (depreciation provided thereon Rs. 15, 000) was sold for Rs. 40, 000. Depreciation charged during the year was Rs. 55, 000.

Q.

From the following figures, calculate cash from operating activities:
$$\begin{array}{ccc}\text{Particulars}& \mathrm{31.03.2017}& \mathrm{31.03.2018}\\ \text{Balance of Profit and Loss}& 3,00,000& 2,50,000\\ \text{Provision for Depreciation}& 60,000& 80,000\\ \text{Outstanding Wages}& 18,000& 15,000\\ \text{Prepaid Insurance}& 6,000& 9,000\\ \text{Goodwill}& 40,000& 32,000\\ \text{Provision for doubtful Debts}& 10,000& 14,000\\ \text{Balance of Trade Receivables}& 1,40,000& 98,000\\ \text{Cash and Bank Balance}& 30,000& 25,000\end{array}$$

Q.

From the following extracts taken from the Balance sheets of M/s Khanduja Ltd., on 31st March as dthe additional information provided, you are required to Calculate:
(i) Cash Flows from Operting Activities.
(ii) Cash Flows from Financing Activities.
$$\begin{array}{ccc}\text{Equity and Liabilities}& 31-03-2015& 31-03-2016\\ \text{Equity Share Capital}& 20,00,000& 30,00,000\\ 10\%\text{Preference Share Capital}& 2,00,000& 1,00,000\\ \text{Securities premium Reserve A/c}& -& 95,000\\ \text{Profit and Loss Balance}& 4,00,000& 8,00,000\\ 10\%\text{Debentures}& 10,00,000& 10,00,000\end{array}$$

Additional Information:
1. Fresh equity shares were issued on 31st March 2016 at a premium of 10%
2. Interim Dividend was paid on equity shares @8%
3. Preference shares were redeemed on 31st March, 2016 at premium of 5%. Premium on redemption was charged against premium received on issue of fresh equity shares.

Q.

X Ltd. made a profit of Rs. 5, 00, 000 after considering the following items:
$$\begin{array}{cc}\text{I. Goodwill written off}& Rs.5,000\\ \text{II. Depreciation on Fixed Tangible assets}& Rs.50,000\\ \text{III. Loss on sale of Fixed Tangible Assets (Machinery)}& Rs.20,000\\ \text{IV. Provision for Doubtful Debts}& Rs.10,000\\ \text{V. Gain on sale of Fixed Tangible Assets (Land)}& Rs.7,500\end{array}$$

Additional Information :
$$\begin{array}{ccc}\text{Particulars}& \text{31-03-2017}& \text{31-02-2016}\\ & & \\ \text{Trade Receivables}& 78,000& 52,000\\ \text{Prepaid Expenses}& 3,000& 2,000\\ \text{Trade Payables}& 51,000& 40,000\\ \text{Expenses Payable}& 20,000& 34,000\\ & & \end{array}$$
You are required to calculcate cash flow from operating activities.

Q.

State any four contents of partnership deed.

Q. In case of fixed capital accounts, transactions such as drawings, commission are recorded in a separate account called account.

1. fixed capital
2. current capital
3. fluctuating capital
4. floating capital

Q.

The following is the account of cash transactions of the Nari Kalayan Samittee for the year ended December 31, 2017:

Receipts	Amount Rs	Payments	Amount Rs
Balance from last year	2, 270	Rent	6, 600
Subscriptions	32, 500	Electric charges	3, 200
Life membership fee	3, 250	Lecturer’s fee	730
Donation	2, 500	Office expenses	1, 480
Profit from entertainment	7, 250	Printing and Stationery	1, 050
Sale of old Books (books value Rs 1, 000)	750	Legal fee	1, 870
Interest	350	Books	6, 500
		Furniture purchased	8, 600
		Expenses on nukar drama	1, 300
		Cash in hand	8, 040
		Cash at bank	9, 500
	48, 870		48, 870

You are required to prepare an Income and Expenditure Account after the following adjustments:

(a) Subscription still to be received are Rs 750, but subscription include Rs 500 for the year 2018.

(b) In the beginning of the year the Sangh owned building Rs 20, 000 and furniture Rs 3, 000 and Books Rs 2, 000.

(c) Provide depreciation on furniture @ 5% (including purchase), books @ 10% and building @ 5%.

Q.

Current accounts of the partners should be opened when the capitals are:

1. Floating

2. Fixed

3. Normal

4. Fluctuating

Q.

Under ___ Method, all adjustments for drawings, salary, interest on capital, salary interest on capital, etc. are made in the capital account.

1. Fixed capital account

2. Current account

3. Fluctuating capital account

4. Floating capital account

Q. Current accounts of the partners should be opened when the capitals are .

1. normal
2. floating
3. fixed
4. fluctuating

Q.

From the following information, Calculate:
(i) Cash Flows from Investing Activities, and
(ii) Cash Flows from Financing Activities.
$$\begin{array}{ccc}& \text{31st March,}& \text{31st March,}\\ \text{Particulars}& 2018& 2017\\ & \text{Rs.}& \text{Rs.}\\ \text{Plant and Machinery}& 6,80,000& 5,60,000\\ \text{Accumulated Depreciation on Plant and Machinery}& 1,70,000& 1,48,000\\ \text{Equity Share Capital}& 12,00,000& 10,00,000\\ \text{Loan from Bank}& 2,00,000& 1,50,000\end{array}$$
Additional Information:

(i) During the year a machine costing Rs. 1, 20, 000 was sold at a profit of Rs. 15, 000. Depreciation on Plant and Machinery charged during the year amounted to Rs. 50, 000.
(ii) Interest paid on Bank Loan amounted to Rs. 30, 000
(iii) Dividend paid Rs. 80, 000

Q. X and Y are partners sharing profits and losses in the ratio of 3 : 1. Z is admitted into partnership for 1$/5^{\text{th}}$ share in profits for which he brings ₹ 25, 000 as his share of capital. Hence, the adjusted capital of X and Y will be:

[0.88 marks]

1. X - ₹75, 000, Y - ₹25, 000
2. X - ₹40, 000, Y - ₹8, 000
3. X - ₹45, 000, Y - ₹15, 000
4. X - ₹85, 000, Y - ₹17, 000

Q.

Under which capital method, there are 2 accounts opened for each partner?

1. Fluctuating

2. Normal

3. Floating

4. Fixed

Q. What is a Partnership Deed?

Q.

Under ___ method , the capital account may have either debit or credit balances.

1. Fixed capital account

2. Fluctuating capital account

3. Interest on capital

4. None of the above

Q.

X and Y were partners in a firm sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2017 was as follows:

$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Rs}& \text{Assets}& \text{Rs}\\ \text{Creditors}& 42,000& \text{Current Assets}& 2,00,000\\ \text{Employee's Provident Fund}& 20,000& \text{Investment}& 50,000\\ \text{Contingency Reserve}& 30,000& \text{Furniture}& 20,000\\ \text{Profit \& Loss Account}& 45,000& \text{Machinery}& 90,000\\ \text{Workmen Compensation Reserve}& 18,000& \text{Advertisement Expenditure}& \\ \text{Investment Fluctuation Reserve}& 25,000& \text{(Deferred Revenue}& \\ \text{Capitals:}X1,20,000& & \text{Expenditure)}& 20,000\\ Y\underset{–}{80,000}& 2,00,000& & \\ & \underset{–}{\overline{3,80,000}}& & \underset{–}{\overline{3,80,000}}\end{array}$

They admit Z into partnership on 1st April, 2017 and the new profit sharing ratio is agreed at 2 : 1 : 1. It is estimated that:

(i) Claim on account of Workmen's Compensation is estimated at Rs 10, 000.

(ii) Market value of Investments is Rs 46, 000.

Give necessary journal entries to adjust accumulated profits and losses.

Q. A and B are partners sharing profits and losses In the ratio of 3 : 1. On 1st April, 2017; their capitals were: A Rs. 50, 000 and B Rs. 30, 000. During the year ended 31st March, 2018 they earned a net profit of Rs. 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 Rs. 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 Rs. 8, 000 and B Rs. 6, 000. Turnover for the year was Rs. 3, 00, 000.
After considering the above facts, you are required to prepare Profit and Loss Appropriation Account and Partners' Capital Accounts.

Q. Brinda Ltd., has furnished the following information:
(a) 25, 000, 10% debentures of Rs. 100 each;
(b) Bank Loan of Rs. 10, 00, 000 repayable after 5 years;
(c) Interest on debentures is yet to be paid.

Show the above items in the balance sheet of the company as at March 31, 2017.

Q.

Under ___ method, the balance of the capital account fluctuates from year to year.

1. Fixed capital account

2. Current account

3. Fluctuating capital account

4. Floating capital account

Q.

Hero Ltd. Had the following balances:
$$\begin{array}{cc}\text{Non- Current Investments on 31st March, 2016}& 3,40,000\\ \text{Non- Current Investments on 31st March, 2017}& 2,80,000\end{array}$$
During the year the company had had sold 40% of its original investments at a profit of Rs. 84, 000.
Calculate sources and uses of cash.

Q.

Which of the following is(are) type(s) of capital account in partnership?

1. Current capital

2. Fluctuating capital

3. Fixed Capital

4. Both fixed & fluctuating capital

Q.

Under which capital method, the capital in the beginning of the year shall be always different from that in the end of the year?

1. Fixed capital account

2. Current account

3. Fluctuating capital account

4. Floating capital account