How to solve Tripathi and Chauhan (Q1) Fixed Capital problem?

Calculate Interest on Capital and Salary. Since capitals are fixed, prepare Partners' Current Accounts. Credit Salary (12k each), IoC (3k, 2k), and Profit Share. Debit Drawings and IoD.

What is the rule for Interest on Partner's Loan in the absence of a deed (Q3)?

In the absence of a partnership deed, the Indian Partnership Act 1932 mandates that interest on a partner's loan is allowed at 6% per annum.

How is Manager's Commission calculated in Question 6 (Lokesh & Azad)?

The profit given is after Azad's salary. Add back the salary to get Net Profit before appropriations (12,500 + 2,500 = 15,000). Calculate 5% commission on 15,000, which is ₹750.

How to handle Guarantee of Profit in Question 9 (Amann, Babita, Suresh)?

In 2019, Suresh's share is 8,000 against a guarantee of 10,000. The deficiency of 2,000 is borne specifically by Babita. In 2020, Suresh's share is 12,000, which exceeds the guarantee, so no adjustment is needed.

Partnership Accounts Practice – Short Answers

Partnership Accounts

Short Answer Questions • Practice Set

Q1 Define Partnership Deed.

A Partnership Deed is a document in writing that contains the terms and conditions of the partnership agreement. It serves as the legal constitution of the firm, clearly defining the relationship among partners and outlining their rights, duties, and liabilities to avoid future disputes.

Q2 Why is it considered desirable to make the partnership agreement in writing?

Although not mandatory under the Partnership Act 1932, a written agreement is desirable because:

It acts as tangible evidence of the agreed terms in a court of law.
It facilitates the settlement of disputes or misunderstandings among partners.
It clearly regulates the duties, powers, and liabilities of each partner.

Q3 List the items debited/credited in Capital Accounts (Fixed vs Fluctuating).

Method	Credited Items (+)	Debited Items (-)
(i) Fixed Capitals	Additional Capital introduced.	Permanent withdrawal of Capital. (Other adjustments go to Current A/c)
(ii) Fluctuating	Opening Bal, Add. Capital, IoC, Salary, Profit Share.	Drawings, IoD, Loss Share, Withdrawal of Capital.

Q4 Why is Profit and Loss Appropriation Account prepared?

The Profit and Loss Appropriation Account is prepared to show the distribution of net profit among the partners. It records appropriations such as:

Interest on Capital
Partner’s Salary/Commission
Interest on Drawings
Transfer to Reserves

Q5 Give two circumstances under which fixed capitals may change.

The balance in a Fixed Capital Account changes only under these two circumstances:

When additional capital is introduced by a partner.
When a part of the capital is permanently withdrawn by a partner.

Q6 Calculation Period: Fixed amount withdrawn on 1st day of every quarter.

The interest is calculated for an Average Period of 7.5 months.

$$ \text{Avg Period} = \frac{\text{Months left after 1st drawing (12)} + \text{Months left after last drawing (3)}}{2} $$ $$ = \frac{15}{2} = 7.5 \text{ months} $$

Q7 In the absence of Partnership deed, specify the rules relating to the following.

Item	Rule Applied (Indian Partnership Act, 1932)
(i) Sharing of Profits	Equal Ratio
(ii) Interest on Capital	Not Allowed
(iii) Interest on Drawings	Not Charged
(iv) Interest on Loan	Allowed @ 6% p.a.
(v) Salary to Partner	Not Allowed

Partnership Accounts – Long Answer Practice

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Long Answer Questions

Q1 What is meant by partnership? Explain its chief characteristics.

Definition: According to Section 4 of the Indian Partnership Act, 1932, Partnership is “the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”

Chief Characteristics:

Two or more persons: Minimum 2 partners are required. Maximum limit is 50 (as per Companies Rules, 2014).
Agreement: It must be the outcome of an agreement (oral or written) between persons.
Business: The agreement must be to carry on a lawful business.
Sharing of Profits: The agreement must be to share profits (sharing of loss is implied).
Mutual Agency: This is the most crucial test. Every partner is both a principal and an agent for other partners.

Q2 Discuss provisions of Partnership Act 1932 (No Partnership Deed).

In the absence of a Partnership Deed, the following provisions of the Indian Partnership Act, 1932 apply:

Provision	Rule Applied
Profit Sharing Ratio	Equal (1:1)
Interest on Capital	Not Allowed
Interest on Drawings	Not Charged
Salary/Commission	Not Paid to any partner
Interest on Loan	Allowed at 6% per annum

Q3 Explain why it is considered better to make a partnership agreement in writing.

Although the law does not make it mandatory, having a written agreement (Partnership Deed) is highly desirable because:

Evidence in Court: It serves as tangible evidence of the terms agreed upon if a dispute arises.
Dispute Resolution: It helps in resolving misunderstandings regarding profit ratios, interest rates, or roles.
Clarity of Rights: It clearly defines the rights, duties, and liabilities of every partner.
Regulation: It provides clear guidelines for situations like admission, retirement, or death of a partner.

Q4 Illustrate how interest on drawings will be calculated under various situations.

Interest on drawings is calculated based on the Average Period Method when a fixed amount is withdrawn at regular intervals.

$$ \text{Interest} = \text{Total Drawings} \times \frac{\text{Rate}}{100} \times \frac{\text{Avg Period}}{12} $$

Situation	Average Period
Beginning of every month	6.5 Months
Middle of every month	6.0 Months
End of every month	5.5 Months
Beginning of each quarter	7.5 Months
End of each quarter	4.5 Months

Note: If the date of withdrawal is not given, interest is calculated for 6 months on an average basis.

Q5 How will you deal with a change in profit sharing ratio among existing partners?

When the profit-sharing ratio changes, one or more partners gain while others sacrifice. The gaining partner must compensate the sacrificing partner for the proportionate share of Goodwill.

Steps for Adjustment:

Calculate Sacrificing Ratio = Old Ratio – New Ratio.
Value the firm’s Goodwill.
Calculate compensation: $\text{Goodwill} \times \text{Share Gained}$.
Pass the Adjustment Entry.

Illustration:
Partners A & B change ratio from 3:2 to 1:1. Firm Goodwill = ₹60,000.
$$ \text{A’s Sacrifice} = \frac{3}{5} – \frac{1}{2} = \frac{1}{10} $$ $$ \text{Amount} = 60,000 \times \frac{1}{10} = 6,000 $$ Journal Entry:
B’s Capital A/c … Dr. 6,000
To A’s Capital A/c 6,000

Partnership Accounts Numericals (Q1-Q5) Solutions | LearnCBSEHub

Numerical Solutions

Questions 1 to 5 • Detailed Calculations & Logic

Q1 Tripathi & Chauhan (3:2). Fixed Capitals. Prepare Accounts.

Working Notes

Salary: ₹1,000 × 12 = 12,000 each. (Total 24,000).
Interest on Capital (5%): Tripathi (3,000), Chauhan (2,000). Total 5,000.
Interest on Drawings: Given as flat amounts (irrespective of period). Tripathi: 12k×5%=600; Chauhan: 8k×5%=400. Total 1,000.
Divisible Profit: 30,000(NP) + 1,000(IoD) – 24,000(Sal) – 5,000(IoC) = 2,000.
Distribution (3:2): Tripathi 1,200 | Chauhan 800.

Partners’ Current Accounts

Particulars	Tripathi	Chauhan	Particulars	Tripathi	Chauhan
To Drawings	12,000	8,000	By Salaries	12,000	12,000
To Int. on Drawings	600	400	By Int. on Capital	3,000	2,000
To Balance c/d	3,600	6,400	By P&L Approp.	1,200	800
Total	16,200	14,800	Total	16,200	14,800

*Since Capitals are Fixed, balances remain 60,000 and 40,000 in Capital Accounts.

Q2 Anubha & Kajal (2:1). Fluctuating Capitals.

Working Notes

Salary: Anubha (8,400), Kajal (6,000). Total 14,400.
IoC (5%): Anubha (4,500), Kajal (3,000). Total 7,500.
IoD (5% p.a.): Time not given (use 6 months). Anubha (213), Kajal (163). Total 376.
(Note: NCERT Answer key implies a flat 5% calculation which gives different values, but standard rule is 6 months).
Divisible Profit: 45,000 + 376 – 14,400 – 7,500 = 23,476.
Distribution (2:1): Anubha 15,651 | Kajal 7,825.

Partners’ Capital Accounts

Particulars	Anubha	Kajal	Particulars	Anubha	Kajal
To Drawings	8,500	6,500	By Balance b/d	90,000	60,000
To Int. on Drawings	213	163	By Salaries	8,400	6,000
To Balance c/d	1,09,838	70,162	By Int. on Capital	4,500	3,000
			By P&L Approp	15,651	7,825

Q3 Harshad & Dhiman. No Deed. Dispute Settlement.

Rules Applied (Indian Partnership Act 1932):

Interest on Capital: Not Allowed.
Profit Sharing: Equal Ratio.
Salary: Not Allowed.
Interest on Loan: Allowed @ 6% p.a.

Calculations

Net Profit: 1,80,000
Less: Int. on Harshad’s Loan ($1,00,000 \times 6\% \times \frac{6}{12}$) = 3,000
Distributable Profit: 1,77,000.

Final Share (Equal):
Harshad: 88,500
Dhiman: 88,500

Q4 Aakriti & Bindu. No Deed. Interest on Loan.

Since there is no partnership deed, profits are shared equally and interest on loan is 6% p.a.

Net Profit before Interest	43,000
Less: Int. on Aakriti’s Loan (20k × 6% × 6/12)	(600)
Divisible Profit	42,400
Aakriti’s Share (1/2)	21,200
Bindu’s Share (1/2)	21,200

Q5 Rakhi & Shikha. Items as Charge against Profit.

Concept: Charge vs Appropriation

The question states items are a charge. This means they must be debited to P&L Account even if it results in a loss.

Particulars	Amount (₹)
Profit Available	23,200
Less: Shikha’s Salary (5k × 12)	(60,000)
Less: IoC Rakhi (2L × 10%)	(20,000)
Less: IoC Shikha (3L × 10%)	(30,000)
Net Loss	(86,800)

Distribution of Loss (Capital Ratio 2:3):
Rakhi: $86,800 \times \frac{2}{5} = \mathbf{34,720}$ (Dr)
Shikha: $86,800 \times \frac{3}{5} = \mathbf{52,080}$ (Dr)

Partnership Accounts Numericals (Q6-Q10) Solutions | LearnCBSEHub

Numerical Solutions (Part 2)

Questions 6 to 10 • Manager’s Commission, Guarantee & Past Adjustments

Q6 Lokesh & Azad (3:2). Manager’s Commission Calculation.

Concept: Charge against Profit The question gives profit after Azad’s salary. Manager’s commission is calculated on Net Profit before any appropriations.
Given Profit: 12,500. Add Back Salary: 2,500. Correct Net Profit = 15,000.

Manager’s Commission: 15,000 × 5% = ₹750.
Net Profit for Appropriation: 15,000 – 750 = ₹14,250.
Appropriations:
– Azad’s Salary: 2,500
– IoC Lokesh (50k×6%): 3,000
– IoC Azad (30k×6%): 1,800
– Total Appropriation: 7,300
Divisible Profit: 14,250 – 7,300 = ₹6,950.
Distribution (3:2): Lokesh 4,170 | Azad 2,780.

P&L Appropriation Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Azad’s Salary	2,500	By P&L A/c (Net Profit)	14,250
To Interest on Capital	4,800
To Profit Transferred:
Lokesh (Capital)	4,170
Azad (Capital)	2,780
Total	14,250	Total	14,250

Q7 Maneesh & Girish. Partner’s Commission.

Working Notes

Salary (Maneesh): 400 × 12 = 4,800.
Girish’s Commission: 10% of (Net Profit – Maneesh’s Salary).
Calculation: (40,000 – 4,800) × 10% = ₹3,520.
Interest on Capital (7%): Maneesh (7,000), Girish (5,600). Total 12,600.
Interest on Drawings (5%): Maneesh (16k×5%=800), Girish (14k×5%=700). Total 1,500.
Divisible Profit: (40,000 + 1,500) – (4,800 + 3,520 + 12,600) = 41,500 – 20,920 = 20,580.
Share (Equal): 10,290 each.

Q8 Ram, Raj & George (5:3:2). Guarantee of Profit.

Net Profit: ₹40,000. George’s Minimum Guarantee: ₹10,000.

Partner	Share Calculation	Adjustment	Final Amount
Ram (5/10)	20,000	-1,250 (Deficiency)	18,750
Raj (3/10)	12,000	-750 (Deficiency)	11,250
George (2/10)	8,000	+2,000 (Add)	10,000

*Deficiency of 2,000 is borne by Ram & Raj in their profit sharing ratio 5:3.

Q9 Amann, Babita, Suresh. Guarantee by Specific Partner.

Rule: Any deficiency in Suresh’s share (Guarantee: 10,000) is met personally by Babita.

Year 2019 (Profit 40,000)

Suresh Share (1/5): 8,000. Deficiency: 2,000.
Amann (2/5): 16,000 (No change).
Babita (2/5): 16,000 – 2,000 (Deficiency) = 14,000.
Suresh: 8,000 + 2,000 = 10,000.

Year 2020 (Profit 60,000)

Suresh Share (1/5): 12,000.
Since 12,000 > 10,000, no adjustment is needed.
Distribution: Amann 24,000, Babita 24,000, Suresh 12,000.

Q10 Simmi & Sonu. Current Accounts & P&L Appropriation.

Note on Profit Figure: To match the NCERT answer key, the Net Profit is assumed to be 1,50,000 (Question typo 1,50,050).

Interest on Drawings (6 months avg):
Simmi: 20k × 6% × 6/12 = 600.
Sonu: 15k × 6% × 6/12 = 450. Total 1,050.
Appropriations: Salary 21,000 + IoC 4,500 = 25,500.
Divisible Profit: (1,50,000 + 1,050) – 25,500 = 1,25,550.
Share (3:1): Simmi 94,162.5 (Round 94,162), Sonu 31,387.5 (Round 31,388).

Partners’ Current Accounts

Particulars	Simmi	Sonu	Particulars	Simmi	Sonu
To Drawings	20,000	15,000	By Balance b/d	30,000	15,000
To IoD	600	450	By IoC	1,500	3,000
To Balance c/d	1,17,062	42,938	By Salary	12,000	9,000
			By P&L Approp	94,162	31,388
Total	1,37,662	58,388	Total	1,37,662	58,388

Partnership Numericals (Q11-Q15) Solutions

Numerical Solutions (Part 3)

Questions 11 to 15 • Loss, Fluctuating Capitals & Adjustments

Q11 Arvind & Anand: Distribution of Loss.

Rule Check: Case of Loss

Since the firm has incurred a Net Loss of ₹32,400, no Interest on Capital or Salary will be allowed (as they are appropriations, not charges). However, Interest on Drawings will be charged as it is income for the firm.

Interest on Drawings (6% for 6 months):
Arvind: 40,000 × 6% × 6/12 = 1,200
Anand: 28,000 × 6% × 6/12 = 840
Total Income = 2,040
Net Loss to Distribute:
Loss (32,400) – Income (2,040) = 30,360.
Distribution Ratio:
Question mentions 8:3:1 but only 2 partners. Answer derived using ratio 3:1.
Arvind: 30,360 × 3/4 = 22,770
Anand: 30,360 × 1/4 = 7,590

Q12 Ramesh & Suresh: Fluctuating Capitals (Capital Ratio).

Profit Sharing Ratio

Ratio of Capitals = 80,000 : 60,000 = 4:3.

Appropriations:
– IoC (12%): Ramesh (9,600) + Suresh (7,200) = 16,800.
– Salary: Ramesh (24,000) + Suresh (36,000) = 60,000.
– IoD (Given): Ramesh (2,000) + Suresh (2,500) = 4,500.
Divisible Profit:
(1,00,300 Profit + 4,500 IoD) – (16,800 IoC + 60,000 Salary) = 28,000.
Share (4:3):
Ramesh: 16,000 | Suresh: 12,000.

Partners’ Capital Accounts

Particulars	Ramesh	Suresh	Particulars	Ramesh	Suresh
To Drawings	40,000	50,000	By Bank (Cap)	80,000	60,000
To IoD	2,000	2,500	By IoC	9,600	7,200
To Balance c/d	87,600	62,700	By Salary	24,000	36,000
			By P&L Approp	16,000	12,000

Q13 Sukesh & Vanita: Current Accounts.

Interpreting Net Profit

Profit given (9,500) is “before charging IoC” and “after charging Sukesh’s salary”. However, the answer implies that the 9,500 is the figure used to deduct IoC to find distributable profit.

Interest on Capital (5% on 40k): Sukesh 2,000, Vanita 2,000. Total 4,000.
Divisible Profit: 9,500 – 4,000 = 5,500.
Share (3:2): Sukesh 3,300 | Vanita 2,200.

Partners’ Current Accounts

Particulars	Sukesh	Vanita	Particulars	Sukesh	Vanita
To Drawings	10,850	8,150	By Balance b/d	7,200	2,800
To Balance c/d	1,650	6,050	By IoC	2,000	2,000
			By Salary	–	7,200
			By P&L Approp	3,300	2,200

Q14 Rahul, Rohit, Karan: Interest on Capital Calculation.

Formula: Capital × Rate × Time

Partner	Capital	Rate	Interest Amount
Rahul	20,00,000	5%	1,00,000
Rohit	18,00,000	5%	90,000
Karan	16,00,000	5%	80,000

Q15 Sunflower & Pink Rose: Capital Adjustments.

Adjustment Date: October 01, 2019 (6 months after start).

Sunflower Calculation:

On 2,50,000 for 6 months: 2.5L × 10% × 6/12 = 12,500.
On 2,00,000 for 6 months: 2.0L × 10% × 6/12 = 10,000.
Total Interest: 12,500 + 10,000 = 22,500.

Pink Rose Calculation:

On 1,50,000 for 6 months: 1.5L × 10% × 6/12 = 7,500.
On 2,00,000 for 6 months: 2.0L × 10% × 6/12 = 10,000.
Total Interest: 7,500 + 10,000 = 17,500.

Partnership Numerical Solutions (Q16-Q20) | LearnCBSEHub

Numerical Solutions (Part 4)

Questions 16 to 20 • Opening Capitals & Product Method

Q16 Mountain, Hill, Rock: Interest on Opening Capital.

Logic: Opening Capital

Interest on Capital is always calculated on Opening Capital. Since Closing Capitals are given, we must work backwards adding Drawings and deducting Profit.

Assumption: Profit sharing ratio is equal (1:1:1) as not specified. Profit = 1,50,000 (50k each).

Particulars	Mountain	Hill	Rock
Closing Capital (31 Mar)	4,00,000	3,00,000	2,00,000
(+) Drawings	20,000	15,000	10,000
(-) Share of Profit	(50,000)	(50,000)	(50,000)
Opening Capital (1 Apr)	3,70,000	2,65,000	1,60,000
Interest @ 10%	37,000	26,500	16,000

Q17 Neelkant & Mahadev: Fixed Capital Logic.

Rule: Fixed Capitals

The Balance Sheet shows Current Accounts. This means the Capitals are Fixed. Under the Fixed Capital Method, Drawings and Profits do not affect the Capital Account balance (unless capital is introduced/withdrawn).

Therefore, Interest is calculated directly on the Fixed Capital Balances given in the Balance Sheet.

Neelkant: 10,00,000 × 5% = ₹50,000
Mahadev: 10,00,000 × 5% = ₹50,000

Q18 Rishi: Interest on Drawings (Product Method).

Date	Amount (₹)	Months used (upto 31 Mar)	Product
May 01	12,000	11	1,32,000
July 31	6,000	8	48,000
Sep 30	9,000	6	54,000
Nov 30	12,000	4	48,000
Jan 01	8,000	3	24,000
Mar 31	7,000	0	0
Total			3,06,000

Calculation:

$$ \text{Interest} = \text{Total Product} \times \frac{\text{Rate}}{100} \times \frac{1}{12} $$

$$ = 3,06,000 \times \frac{9}{100} \times \frac{1}{12} = \mathbf{₹2,295} $$

Q19 Moli & Golu: Comprehensive Calculation.

Adjustments

Interest on Drawings:
Moli (Begin): 12k × 12% × 6.5/12 = 780
Golu (End): 12k × 12% × 5.5/12 = 660
Interest on Loan (Golu):
10,000 × 6% (Std Rate) × 8/12 (Aug to Mar) = 400.
Net Profit Adjustment:
Profit (20,950) – Int on Loan (400) = 20,550.
Divisible Profit:
20,550 + 1,440(IoD) – 6,000(IoC) = 15,990.

Partners’ Capital Accounts

Particulars	Moli	Golu	Particulars	Moli	Golu
To Drawings	12,000	12,000	By Balance b/d	40,000	20,000
To IoD	780	660	By IoC	4,000	2,000
To Balance c/d	40,814	15,736	By Profit Share	9,594	6,396
Total	53,594	28,396	Total	53,594	28,396

Q20 Rakesh & Roshan: Product Method vs Average Period.

Part A: Rakesh (Irregular Drawings)

Date	Amount	Months (to 31 Mar)	Product
May 31	600	10	6,000
Jun 30	500	9	4,500
Aug 31	1,000	7	7,000
Nov 01	400	5	2,000
Dec 31	1,500	3	4,500
Jan 31	300	2	600
Mar 01	700	1	700
Total			25,300

$$ \text{Interest} = 25,300 \times \frac{6}{100} \times \frac{1}{12} = \mathbf{126.5} $$

Part B: Rohan (Regular Drawings)

Withdrawn at the beginning of each month.
Total Drawings = 400 × 12 = 4,800.
Average Period = 6.5 months.

$$ \text{Interest} = 4,800 \times \frac{6}{100} \times \frac{6.5}{12} = \mathbf{156} $$

Partnership Numerical Solutions (Q16-Q20) | LearnCBSEHub

Numerical Solutions (Part 4)

Questions 16 to 20 • Opening Capitals & Product Method

Q16 Mountain, Hill, Rock: Interest on Opening Capital.

Logic: Opening Capital

Interest on Capital is always calculated on Opening Capital. Since Closing Capitals are given, we must work backwards adding Drawings and deducting Profit.

Assumption: Profit sharing ratio is equal (1:1:1) as not specified. Profit = 1,50,000 (50k each).

Particulars	Mountain	Hill	Rock
Closing Capital (31 Mar)	4,00,000	3,00,000	2,00,000
(+) Drawings	20,000	15,000	10,000
(-) Share of Profit	(50,000)	(50,000)	(50,000)
Opening Capital (1 Apr)	3,70,000	2,65,000	1,60,000
Interest @ 10%	37,000	26,500	16,000

Q17 Neelkant & Mahadev: Fixed Capital Logic.

Rule: Fixed Capitals

Therefore, Interest is calculated directly on the Fixed Capital Balances given in the Balance Sheet.

Neelkant: 10,00,000 × 5% = ₹50,000
Mahadev: 10,00,000 × 5% = ₹50,000

Q18 Rishi: Interest on Drawings (Product Method).

Date	Amount (₹)	Months used (upto 31 Mar)	Product
May 01	12,000	11	1,32,000
July 31	6,000	8	48,000
Sep 30	9,000	6	54,000
Nov 30	12,000	4	48,000
Jan 01	8,000	3	24,000
Mar 31	7,000	0	0
Total			3,06,000

Calculation:

$$ \text{Interest} = \text{Total Product} \times \frac{\text{Rate}}{100} \times \frac{1}{12} $$

$$ = 3,06,000 \times \frac{9}{100} \times \frac{1}{12} = \mathbf{₹2,295} $$

Q19 Moli & Golu: Comprehensive Calculation.

Adjustments

Interest on Drawings:
Moli (Begin): 12k × 12% × 6.5/12 = 780
Golu (End): 12k × 12% × 5.5/12 = 660
Interest on Loan (Golu):
10,000 × 6% (Std Rate) × 8/12 (Aug to Mar) = 400.
Net Profit Adjustment:
Profit (20,950) – Int on Loan (400) = 20,550.
Divisible Profit:
20,550 + 1,440(IoD) – 6,000(IoC) = 15,990.

Partners’ Capital Accounts

Particulars	Moli	Golu	Particulars	Moli	Golu
To Drawings	12,000	12,000	By Balance b/d	40,000	20,000
To IoD	780	660	By IoC	4,000	2,000
To Balance c/d	40,814	15,736	By Profit Share	9,594	6,396
Total	53,594	28,396	Total	53,594	28,396

Q20 Rakesh & Roshan: Product Method vs Average Period.

Part A: Rakesh (Irregular Drawings)

Date	Amount	Months (to 31 Mar)	Product
May 31	600	10	6,000
Jun 30	500	9	4,500
Aug 31	1,000	7	7,000
Nov 01	400	5	2,000
Dec 31	1,500	3	4,500
Jan 31	300	2	600
Mar 01	700	1	700
Total			25,300

$$ \text{Interest} = 25,300 \times \frac{6}{100} \times \frac{1}{12} = \mathbf{126.5} $$

Part B: Rohan (Regular Drawings)

Withdrawn at the beginning of each month.
Total Drawings = 400 × 12 = 4,800.
Average Period = 6.5 months.

$$ \text{Interest} = 4,800 \times \frac{6}{100} \times \frac{6.5}{12} = \mathbf{156} $$

Partnership Numerical Solutions (Q21-Q25) | LearnCBSEHub

Numerical Solutions (Part 5)

Questions 21 to 25 • Monthly Drawings & Capital Adjustment

Q21 Himanshu: Drawings at End of Each Month.

Rule: End of Month

When a fixed amount is withdrawn at the end of each month, the Average Period is 5.5 months.

Total Drawings: 2,500 × 12 = ₹30,000.

Interest Calculation:

$$ \text{IoD} = 30,000 \times \frac{12}{100} \times \frac{5.5}{12} $$

$$ = 3,600 \times \frac{5.5}{12} = \mathbf{₹1,650} $$

Q22 Bharam: Drawings at Start of Each Month.

Rule: Beginning of Month

When a fixed amount is withdrawn at the beginning of each month, the Average Period is 6.5 months.

Total Drawings: 3,000 × 12 = ₹36,000.

Interest Calculation:

$$ \text{IoD} = 36,000 \times \frac{10}{100} \times \frac{6.5}{12} $$

$$ = 3,600 \times \frac{6.5}{12} = \mathbf{₹1,950} $$

Q23 Raj & Neeraj: Interest on Capital (Change in Capital).

Adjustment Date: July 01, 2019 (3 months after start).

Raj’s Calculation:

Period	Capital Used	Calculation	Interest
Apr 1 – Jun 30 (3m)	2,50,000	2.5L × 8% × 3/12	5,000
Jul 1 – Mar 31 (9m)	1,00,000	1.0L × 8% × 9/12	6,000
Total			11,000

Neeraj’s Calculation:

Apr 1 – Jun 30 (3m)	1,50,000	1.5L × 8% × 3/12	3,000
Jul 1 – Mar 31 (9m)	1,00,000	1.0L × 8% × 9/12	6,000
Total			9,000

Q24 Amit & Bhola: Evenly Withdrawn (Date not specified).

Rule: Date Not Specified

When the date of withdrawal is not specified, or amounts are withdrawn evenly throughout the year, Interest is calculated for an Average Period of 6 months.

Amit:

$$ 24,000 \times \frac{10}{100} \times \frac{6}{12} = \mathbf{₹1,200} $$

Bhola:

$$ 16,000 \times \frac{10}{100} \times \frac{6}{12} = \mathbf{₹800} $$

Q25 Harish: Irregular Drawings (Product Method).

Assumption: Financial Year (Ending March 31, 2020).

Date	Amount (₹)	Months (to 31 Mar)	Product
May 2019	4,000	11	44,000
Aug 2019	12,000	8	96,000
Sep 2019	4,000	6	24,000
Dec 2019	12,000	3	36,000
Mar 2020	4,000	0	0
Total			2,00,000

Calculation:

$$ \text{IoD} = 2,00,000 \times \frac{7.5}{100} \times \frac{1}{12} = \mathbf{₹1,250} $$

Note: The textbook answer (1,800) likely assumes different dates or a different year-end (e.g. calendar year with opening balance). Based on standard product method for Financial Year, the result is 1,250.

Partnership Numerical Solutions (Q26-Q30) | LearnCBSEHub

Numerical Solutions (Part 6)

Questions 26 to 30 • Past Adjustments & Profit Guarantees

Q26 Menon: Interest on Drawings (Begin, Mid, End).

Formula $$ \text{Interest} = \text{Total Drawings} \times \frac{\text{Rate}}{100} \times \frac{\text{Avg Period}}{12} $$
Total Drawings = 2,000 × 12 = ₹24,000

Case	Avg Period	Calculation	Interest (₹)
(i) Beginning of Month	6.5	24,000 × 10% × 6.5/12	1,300
(ii) Middle of Month	6.0	24,000 × 10% × 6/12	1,200
(iii) End of Month	5.5	24,000 × 10% × 5.5/12	1,100

Q27 Ram, Shyam, Mohan: Interest on Capital (Past Adjustment).

Critical Step: Find Opening Capital

Interest is calculated on Opening Capital. The given capitals are Closing (after profit & drawings).
Formula: Opening = Closing + Drawings – Profit.

Particulars	Ram	Shyam	Mohan
Closing Capital	24,000	18,000	12,000
(+) Drawings	3,600	4,500	2,700
(-) Profit (36k in 3:2:1)	(18,000)	(12,000)	(6,000)
Opening Capital	9,600	10,500	8,700
Interest @ 5%	480	525	435

Q28 Amit, Sumit, Samiksha: Guarantee of Profit.

Total Profit: 36,000. Ratio: 3:2:1.
Samiksha’s Guarantee: 8,000.

Partner	Actual Share	Adjustment (Deficiency 2,000)	Final Share
Amit (3/6)	18,000	-1,200 (3/5 of Def)	16,800
Sumit (2/6)	12,000	-800 (2/5 of Def)	11,200
Samiksha (1/6)	6,000	+2,000 (Add)	8,000

Q29 Pinki, Deepti, Kaku: Guarantee Deficiency Entry.

Deficiency Calculation

Kaku’s Share: 40,000 × 1/10 = 4,000.
Guaranteed: 5,000. Deficiency = 1,000.
Borne by Pinki & Deepti Equally (as per question).

Pinki bears: 1,000 × 1/2 = 500
Deepti bears: 1,000 × 1/2 = 500

Journal Entry	Debit (₹)	Credit (₹)
Pinki’s Capital A/c … Dr. Deepti’s Capital A/c … Dr. To Kaku’s Capital A/c	500 500	1,000

Q30 Abhay, Siddharth, Kusum: Guarantee by Specific Partner.

Condition: Deficiency in Kusum’s share (Guarantee 10,000) is met personally by Siddharth.

Year 2016 (Profit 40,000)

Kusum Share (2/10): 8,000. Deficiency: 2,000.
Abhay (5/10): 20,000 (No change).
Siddharth (3/10): 12,000 – 2,000 (Deficiency) = 10,000.
Kusum: 8,000 + 2,000 = 10,000.

Year 2017 (Profit 60,000)

Kusum Share (2/10): 12,000.
Since 12,000 > 10,000, no guarantee adjustment is needed.
Distribution: Abhay 30,000, Siddharth 18,000, Kusum 12,000.

Partnership Numerical Solutions (Q31-Q35) | LearnCBSEHub

Numerical Solutions (Part 7)

Questions 31 to 35 • Guarantee of Profit

Q31 Radha, Mary, Fatima: Deficiency Ratio (3:2).

Deficiency Logic

Total Profit: 35,000. Fatima’s Share (1/10): 3,500.
Guaranteed Amount: 5,000. Deficiency = 1,500.
This deficiency is borne by Radha & Mary in 3:2 ratio.

Journal Entry	Debit (₹)	Credit (₹)
Radha’s Capital A/c (1,500 × 3/5)	900
Mary’s Capital A/c (1,500 × 2/5)	600
To Fatima’s Capital A/c		1,500
(Being deficiency adjusted)

Q32 X, Y, Z (3:2:1): Guarantee by Partners.

Net Profit: 30,000. Z’s Guarantee: 8,000.

Partner	Initial Share	Adjustment (Deficiency 3,000)	Final Amount
X (3/6)	15,000	-1,800 (3/5 of Def)	13,200
Y (2/6)	10,000	-1,200 (2/5 of Def)	8,800
Z (1/6)	5,000	+3,000 (Add)	8,000

*Deficiency borne by X & Y in ratio 3:2.

Q33 Arun, Boby, Chintu: Guarantee by Arun.

Condition: Any deficiency for Chintu (Guarantee 60,000) is borne solely by Arun.

Case (i) Profit 2,50,000

Chintu (1/5): 50,000. Deficiency: 10,000.
Arun (2/5): 1,00,000 – 10,000 = 90,000.
Boby (2/5): 1,00,000 (No change).
Chintu: 60,000.

Case (ii) Profit 3,60,000

Chintu (1/5): 72,000.
Since 72,000 > 60,000, no adjustment is needed.
Arun: 1,44,000. Boby: 1,44,000. Chintu: 72,000.

Q34 Ashok, Brijesh, Cheena (2:2:1). Equal Deficiency.

Total Profit: 70,000. Cheena Guarantee: 20,000.

Cheena’s Share (1/5) = 14,000. Deficiency = 6,000.

This deficiency is borne by Ashok & Brijesh. Their ratio is 2:2 (Equal).

Partner	Calculation	Amount (₹)
Ashok	(28,000 – 3,000)	25,000
Brijesh	(28,000 – 3,000)	25,000
Cheena	(14,000 + 3,000 + 3,000)	20,000

Q35 Ram, Mohan, Sohan: IoC & Guarantee.

Step 1: Interest on Capital (10%)
Ram: 50,000 | Mohan: 25,000 | Sohan: 20,000
Total Appropriation = 95,000.

Step 2: Divisible Profit
2,00,000 – 95,000 = 1,05,000.

Step 3: Profit Shares (Ratio 1/2 : 1/3 : 1/6)
Ram: 52,500. Mohan: 35,000. Sohan: 17,500.
Sohan’s Guarantee: 25,000. Deficiency = 7,500.

Step 4: Distribution of Deficiency
Borne by Ram & Mohan in ratio of their profit shares (1/2 : 1/3 = 3:2).
Ram bears: 7,500 × 3/5 = 4,500.
Mohan bears: 7,500 × 2/5 = 3,000.

Partner	Final Profit Share
Ram	52,500 – 4,500 = 48,000
Mohan	35,000 – 3,000 = 32,000
Sohan	17,500 + 7,500 = 25,000

Partnership Numerical Solutions (Q36-Q40) | LearnCBSEHub

Numerical Solutions (Part 8)

Questions 36 to 40 • Past Adjustments & Dual Guarantee

Q36 Amit, Babita, Sona: Dual Guarantee (Fees & Profit).

Step 1: Babita’s Fee Guarantee

Guaranteed Fee: 25,000. Earned: 16,000.
Deficiency: 9,000 (Debited to Babita’s Cap, Credited to P&L Approp).
Total Distributable Profit: 75,000 (NP) + 9,000 (Fee Def.) = 84,000.

Step 2: Sona’s Profit Guarantee

Sona’s Share (1/6 of 84k) = 14,000. Guarantee = 15,000.
Deficiency: 1,000 (Borne by Amit & Babita in 3:2).

Partner	Share Calculation	Adjustment	Final Share
Amit	84,000 × 3/6 = 42,000	-600 (3/5 of 1k)	41,400
Babita	84,000 × 2/6 = 28,000	-400 (2/5 of 1k)	27,600
Sona	84,000 × 1/6 = 14,000	+1,000 (Add)	15,000

*Note: Babita’s final credit in P&L Approp is 27,600. Her capital account will also have a debit of 9,000 for the fee deficiency.

Q37 X, Y, Z: Past Adjustment with Multiple Omissions.

Method: Net Effect

Calculate what should have been credited (IoC, Salary) vs debited (IoD) and compare with the Wrong Profit distribution.

Particulars	X	Y	Z	Total
(Cr) IoC (5%)	5,000	4,000	3,000	12,000
(Cr) Salary	1,000	1,500	–	2,500
(Dr) IoD	(700)	(500)	(300)	(1,500)
(Cr) Correct Profit (47k)	28,200	9,400	9,400	47,000
Total Credit Needed	33,500	14,400	12,100	60,000
(Dr) Wrong Profit (3:1:1)	(36,000)	(12,000)	(12,000)	(60,000)
Net Adjustment	2,500 (Dr)	2,400 (Cr)	100 (Cr)	Nil

Entry: X’s Current A/c Dr. 2,500 To Y’s Current 2,400 To Z’s Current 100.

Q38 Harry, Porter, Ali: Retrospective Ratio Change.

Total Profits (3 years): 22k + 24k + 29k = 75,000.

Change: From 2:2:1 (Old) to 1:1:1 (New).

Partner	Received (2:2:1)	Should Receive (1:1:1)	Adjustment
Harry	30,000	25,000	5,000 (Dr)
Porter	30,000	25,000	5,000 (Dr)
Ali	15,000	25,000	10,000 (Cr)

Entry: Harry Dr 5,000, Porter Dr 5,000 To Ali 10,000.

Q39 Mannu & Shrishti: Adjustment with Closing Capital.

Opening Capital Calculation

Given Closing Capitals: Mannu 30k, Shrishti 10k.
Profit Credited: 5,000 (3:2 = 3k, 2k).
Drawings (Asset Side): Not deducted from Capital.
Opening Cap = Closing Cap – Profit Credited
Mannu: 27,000. Shrishti: 8,000.

IoC (5%): Mannu 1,350 + Shrishti 400 = 1,750.
IoD (6%, 6m): Mannu 120 + Shrishti 60 = 180.
Correct Profit: 5,000 + 180 – 1,750 = 3,430.
Correct Share (3:2): Mannu 2,058, Shrishti 1,372.

Net Adjustment:
Mannu: (Cr) 1350 + 2058 – 120 (IoD) – 3000 (Wrong Profit) = +288 (Cr).
Shrishti: (Cr) 400 + 1372 – 60 (IoD) – 2000 (Wrong Profit) = -288 (Dr).

Q40 Eluin, Monu, Ahmed: Comprehensive Adjustment.

Net Loss to Partners

Total IoC (5,200) – Total IoD (1,060) = 4,140.
This amount represents the net expense omitted. It must be credited as IoC, debited as IoD, and the net loss debited in profit ratio.

Partner	(Cr) IoC	(Dr) IoD	(Dr) Loss Share	Net Effect
Eluin	2,000	(500)	(2,070)	570 (Dr)
Monu	1,750	(360)	(1,380)	10 (Cr)
Ahmed	1,450	(200)	(690)	560 (Cr)

Entry: Eluin Dr 570, To Monu 10, To Ahmed 560.

Partnership Numerical Solutions (Q41-Q43) | LearnCBSEHub

Numerical Solutions (Part 9)

Questions 41 to 43 • Advanced Past Adjustments

Q41 Azad & Benny: Omission of Interest (Fixed Capital).

Net Effect Logic

Interest on Capital (5%) was omitted. This interest is an expense for the firm, reducing divisible profits.
Step 1: Credit IoC to partners.
Step 2: Debit the loss caused by IoC in profit sharing ratio (Equal).

Particulars	Azad	Benny	Total
(Cr) Interest on Capital	2,000	4,000	6,000
(Dr) Loss Distributed (1:1)	(3,000)	(3,000)	(6,000)
Net Adjustment	1,000 (Dr)	1,000 (Cr)	Nil

Journal Entry: Azad’s Current A/c Dr. 1,000 To Benny’s Current A/c 1,000.

Q42 Mohan, Vijay, Anil: Opening Capital Calculation.

Step 1: Calculate Opening Capital

Opening = Closing + Drawings – Profit.
Assuming Profit Sharing Ratio is Equal (1:1:1) as implied by distribution.

Particulars	Mohan	Vijay	Anil
Closing Cap	30,000	25,000	20,000
(+) Drawings	5,000	4,000	3,000
(-) Profit (24k/3)	(8,000)	(8,000)	(8,000)
Opening Cap	27,000	21,000	15,000

Step 2: Adjustment Table

Particulars	Mohan	Vijay	Anil	Total
(Cr) IoC (10%)	2,700	2,100	1,500	6,300
(Dr) IoD	(250)	(200)	(150)	(600)
Net Amount Payable	2,450	1,900	1,350	5,700
(Dr) Loss (5,700 in 1:1:1)	(1,900)	(1,900)	(1,900)	(5,700)
Net Adjustment	550 (Cr)	Nil	550 (Dr)	Nil

Entry: Anil’s Capital A/c Dr. 550 To Mohan’s Capital A/c 550.

Q43 Anju, Manju, Mamta: Multi-Year Adjustment.

Logic: Changing Profit Ratios

Interest on Capital (5%) was omitted for 3 years. Since profit sharing ratios changed each year, we must debit the loss (IoC amount) for each year separately in that year’s ratio.

Annual IoC: Anju 500, Manju 400, Mamta 300. Total = 1,200.

Year	Particulars	Anju	Manju	Mamta
2016	(Cr) IoC	500	400	300
2016	(Dr) Profit Reversal (4:3:5)	(400)	(300)	(500)
2017	(Cr) IoC	500	400	300
2017	(Dr) Profit Reversal (3:2:1)	(600)	(400)	(200)
2018	(Cr) IoC	500	400	300
2018	(Dr) Profit Reversal (1:1:1)	(400)	(400)	(400)
Total Net Effect		+100 (Cr)	+100 (Cr)	-200 (Dr)

Adjustment Entry: Mamta’s Current A/c Dr. 200 To Anju’s Current A/c 100 To Manju’s Current A/c 100.

Partnership Accounts – Test Your Understanding Solutions

Checklist Solutions

Test Your Understanding • Quick Keys

I Test Your Understanding – I (Valid/Invalid & True/False)

1. Validity of Statements

Statement No.	Status
(i)	Invalid
(ii)	Invalid
(iii)	Valid
(iv)	Invalid

2. True or False

Statement No.	Answer
(i)	True
(ii)	True
(iii)	True
(iv)	False
(v)	False
(vi)	False

II Test Your Understanding – II (Rules in Absence of Deed)

1. Rules Applied

Item	Ruling
(i) Interest on Loan	Allowed @ 6% p.a.
(ii) Interest on Capital/Drawings	Not Allowed / Not Charged
(iii) Salary/Commission	Not Given to any partner
(iv) Profit Sharing	Shared Equally

2. Profit Distribution Calculation

Since no profit-sharing ratio is mentioned, profits are distributed equally.

Partner	Calculation	Amount
Reena	67,500 ÷ 2	₹ 33,750
Raman	67,500 ÷ 2	₹ 33,750

III Test Your Understanding – III (Calculations)

1. Interest on Capital

Partner	Amount
Rani	₹ 9,000
Suman	₹ 6,300

2. Profit Distribution Scenarios

Case	Partner	Result
(a) Adequate Profit	Priya	₹ 78,750 (Profit Share)
(a) Adequate Profit	Kajal	₹ 47,250 (Profit Share)
(b) IoC as Charge	Profit	NIL (Profit fully absorbed by Charge)
	Priya (IoC)	₹ 54,000
	Kajal (IoC)	₹ 72,000