XII ACCOUNTANCY ASSIGNMENT | 2023-24

(Fluctuating Capitals)
1. Shiv and Hari entered into partnership on 1st April, 2020, contributing Rs.5,00,000 and Rs.2,00,000
respectively. Hari also introduced Rs.1 ,00,000 as additional capital on 1st July, 2020. They agreed to share
profits and losses in the ratio of 3 : 2. Following information is provided regarding the partnership :
(i) Shiv and Hari, each are allowed a salary of Rs.5,000 per quarter.
(ii) Interest is to be allowed on Capitals @ 8% p.a. and charged on drawings at 10% p.a. ' ‘ ^
Drawings of Shiv and Hari during the year were Rs. 12,000 and Rs. 10,000 respectively. Profit as at 31st
March, 2021 before the above mentioned adjustments was Rs. 1,96,000.
Prepare : (i) Necessary journal entries relating to appropriation of profits,
(ii) Profit and Loss Appropriation A/c, and
(iii) Partner’s Capital A/cs.

2. On 1st April, 2018 A and B commenced business with Capitals of Rs.6,00,000 and Rs.2,00,000
respectively. On 31st March, 2019 the net profit (before taking into account the provisions of deed) was
Rs.2,40,000. Interest on capitals is to be allowed at 6% p.a. B was entitled to a salary of Rs.60,000 p.a. The
drawings of the partners A and B were Rs.60,000 and Rs.40,000 respectively. The interest on Drawings for
A being Rs.2,000 and B Rs. 1,000. Assuming that A and B are equal partners, prepare the Profit & Loss
Appropriation A/c and Partner’s Capital Accounts as at 31st March, 2019.
[Ans. Divisible Profits Rs. 1,35,000; Capitals A Rs.6,41,500 and B Rs.2,98,500.]
Note : In the absence of information, Capitals will be treated fluctuating.

3. Anubha and Kajal entered into partnership sharing profits and losses in the ratio of 2 : 1. Their capitals
were Rs.90,000 and Rs.60,000. The profit during the year were Rs.45,000. According to partnership deed,
both partners are allowed salary, Rs.700 per month to Anubha and Rs.500 per month to Kajal. Interest is
allowed on capital @ 5% p.a. The drawings during the period were Rs.8,500 for Anubha and Rs.6,500 for
Kajal. Interest is to be charged @ 5% p.a. on drawings. Prepare partners capital accounts, assuming that
the capital accounts are fluctuating.
[Ans. Divisible Profit Rs.23,476; Capital Account balance : Anubha Rs.1,09,838 and Kajal Rs.70,162.
Interest on Drawings : Anubha Rs.213 and Kajal Rs. 163.]
Hint: Interest on Drawings will be charged for six months.

4. A and B started a partnership business on 1 st April ,2018. They contributed Rs.6,00,000 and Rs.4,00,000
respectively, as their capitals. The terms of the partnership agreement are as under :
(i) Interest on capital and drawings @ 6% per annum.
(ii) B is to get a monthly salary of Rs.2,500.
(iii) Sharing of profit or loss will be in the ratio of their capital contribution.
The profit for the year ended 31st March, 2019, before making above appropriations was Rs.2,07,400. The
drawings of A and B were Rs.48,000 and Rs.40,000 respectively. Interest on drawings amounted to
Rs.1,5'00 for Z and Rs.1,100 for B.
Prepare profit and loss appropriation account and partner’s capital accounts assuming that their capitals are
fluctuating.
[Ans. Divisible Profits Rs. 1,20,000; A’s Capital Balance Rs.6,58,500 and B's Capital Balance
Rs.4,60,900.]

5. X and Yare partners with capitals of Rs. 1,00,000 and Rs.80,000 respectively on 1st April, 2020 and their
profit sharing ratio is 2 : 1. Interest on capital is agreed @ 12% p.a. X is to be allowed an annual salary of
Rs.6,000. The profit for the year ended 31st March, 2021 amounted to Rs. 50,000. Manager is entitled to a
commission of 10% of the profits.
Prepare Profit and Loss Appropriation Account and Capital Accounts.
[Ans. Divisible Profit Rs. 17,400; Commission to manager is 10% of Rs.50,000, i.e., Rs.5,000. Balances
of Capital Accounts : A Rs. 1,23,600 and Y Rs. 1,01,400.]
 XII ACCOUNTANCY ASSIGNMENT | 2023-24

6. A, B and C were partners in a firm having capitals of Rs.2,00,000; Rs.2,00,000 and Rs.80,000 respectively
on 1st April, 2020. Their Current Account balances were A : Rs.20,000; B : Rs.10,000 and C : Rs.5,000
(Dr.). According to the partnership deed the partners were entitled to interest on capital @ 10% p.a. B being
the working partner was also entitled to a salary of Rs.6,000 per quarter. The profits were to be divided as
follows :
(a) The first Rs.60,000 in proportion to their capitals.
(b) Next Rs. 1,00,000 in the ratio of 4 : 3 : 1.
(c) Remaining profits to be shared equally.
The firm made a profit of Rs.2,80,000 for the year ended 31st March, 2021 before charging any of the
above items. Prepare the Profit & Loss Appropriation Account and pass necessary journal entry for
apportionment of profits.
[Ans. Share of Profit : A Rs.91,000; B Rs.78,500 and C Rs.38,500.]

7. A, B and C entered into partnership on 1st April 2020 with capitals of Rs. 10,00,000, Rs.8,00,000 and
Rs.5,00,000 respectively. On 1st July 2020, B advanced Rs.2,00,000 and on 1st December 2020 C advanced
Rs. 1,00,000 by way of loans to the firm.
The Profit and Loss Account for the year ended 31.3.2021 disclosed a profit of Rs.7,70,000 but the partners
could not agree upon the rate of interest on loans and the profit sharing ratio. Prepare partner’s Capital A/cs.
[Ans. Balance of Capital A/cs A Rs. 12,53,000, B Rs. 10,53,000 and C Rs.7,53,000.]
Hint: In the absence of agreement, Interest on loan is to be paid @6% p.a. and profit will be shared
equally.

8. A. B and C are partners in a firm sharing profits and losses equally. On 1st April, 2018 their fixed capitals
were Rs.8,00,000, Rs.6,00,000 and Rs.6,00,000 respectively. On 1st October 2018, A advanced Rs.
1,00,000 to the firm whereas C took a loan of Rs. 1,50,000 from the firm on the same date. It was agreed
among the partners that C will pay interest @ 10% p.a. Profit for the year ended 31 st March, 2019
amounted to Rs.4,20,000 before allowing or charging interest on loans. Pass journal entries for i. crest on
loans and prepare Current Accounts of the partners.
[Ans. Divisible Profit Rs.4,24,500; Current Account Balances : A Rs. 1,41,500 (Cr.); B Rs. 1,41,500 (Cr.)
and C Rs. 1,34,000 (Cr.)]
Hint. Interest on A's Loan will not be credited to his Current Account. It will be credited to his Loan A/c.

9. Radha and Rukmani are partners in a firm with fixed capitals of Rs.2,00,000 and Rs.3,00,000 respectively.
They share profits in the ratio of 1 : 2. Both partners are entitled to interest on capitals @ 8% per annum.
In addition, Rukmani is entitled to a salary of Rs.20,000 per month. Business is being carried from the
property owned by Radha on a yearly rent of Rs. 1,20,000. Net Profit for the year ended 31 st March 2018
before providing for rent was Rs.5,50,000.
You are required to draw Profit & Loss Appropriation Account for the year ended 31st March, 2018. .
[Ans. Share of Profit transferred to Radha’s Current A/c Rs.50,000 and Rukmani’s Current A/c Rs.
1,00,000.]