Quantitative Aptitude

Partnership

842 Questions
All Capital changes, admission, and withdrawal 249 Compound partnership and time-weighted capital 186 Absolute profit or percentage difference to ratio 126 Simple partnership 100 Working and sleeping partners 79 Retirement and gaining ratio 63 Interest on capital and fixed allowances 39

Partnership Questions

Multiple choice

A & B entered in a joint venture sharing profits and losses in the ratio of 3:2. A supplies goods to the value of Rs.80,000 and incurs expenses Rs.6,000. B supplies goods to the value of Rs.14,000 and his expenses amount to Rs.2,000. B sells goods on behalf of the joint venture and realizes Rs.1,50,000. B entitled to a commission of 5% on sales. Find out A's share of profit on venture?

  1. Rs.24,300

  2. Rs.25,000

  3. Rs.26,000

  4. Rs.20,300
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Total sales = 150,000. Commission = 5% of 150,000 = 7,500. Total costs = 80,000 + 6,000 + 14,000 + 2,000 = 102,000. Profit = 150,000 - 102,000 - 7,500 = 40,500. A's share = 40,500 * (3/5) = 24,300.

Multiple choice

Ram & Mohan entered into a joint venture to purchase and sell new year gifts. They agreed to share profits and losses equally. Ram purchased goods worth Rs.1,00,000 and spent Rs.6,000 in sending the good to Mohan. He also paid Rs.2,000 for insurance. Ram drew a bill of exchange upon Mohan for Rs.1,00,000 at 2 months. He got the bill discounted @ 18% p.a. Mohan spent Rs.3,000 on cartage, Rs.5,000 as rent and Rs.5,000 on advertisement. He sold all the gifts for Rs.2,00,000 after retaining gifts worth Rs.2,000 for his personal use. Considering the given data; which of the following statement is correct?

  1. Ram will remit Rs.48,000 to Mohan

  2. Mohan will remit Rs.48,000 to Ram

  3. Ram will remit Rs.50,000 to Mohan

  4. Mohan will remit Rs.50,000 to Ram
Reveal answer Fill a bubble to check yourself
D Correct answer
Multiple choice

X and Y are partners who share net income in the ratio of 4:3 respectively and have Capital balances of Rs. 10,000 and 8,000 respectively. Z is admitted for 1/8 share and brings Rs. 6,000 for Capital and Rs. 4,200 for goodwill. The new Capital balances of X, Y and Z respectively are Rs.:

  1. 10,000, 8,000 and 10,200

  2. 12,100, 10,100 and 6,000

  3. 10,000, 8,000 and 6,000

  4. 12,400, 9,800 and 6,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Z brings 6000 capital and 4200 goodwill. Goodwill is shared by X and Y in 4:3 ratio: X gets 2400, Y gets 1800. New balances: X = 10000 + 2400 = 12400. Y = 8000 + 1800 = 9800. Z = 6000.

Multiple choice

X,Y & Z are partners sharing profits and losses in the ratio of 4:3:2. During 2015, their capital drawings & salaries were as follows: partners capital (Rs.) Salaries(Rs.) Drawings (Rs.) X 2,40,000 12,000 12,000 Y 1,60,000 12,000 6,000 Z 1,00,000 12,000 3,000 Partners are entitled to interest on capital @ 5% p.a. Interest on drawings to be charged @ 8% p.a. The net profit for the year ended 31-12-2015 was Rs. 1,45,000. On 1-7-2015 X made advance of Rs. 1,00,000 to the firm at 6% P.a. Y's share of profit after above appropriation will be ___________.

  1. Rs. 37,707

  2. Rs. 28,560

  3. Rs. 18,853

  4. Rs. 25,753
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice

$X$ and $Y$ are partners sharing profits in the ratio of $2:1$. They admit $Z$ into the partnership for $1/4^{th}$ share in profit for which he brings in Rs.$20,000$ as his share capital. Hence, the adjusted capital of $X$ and $Y$ will be __________ .
  1. Rs.$40,000$ and Rs.$20,000$ respectively
  2. Rs.$32,000$ and Rs.$16,000$ respectively
  3. Rs.$60,000$ and Rs.$30,000$ respectively

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

If Z brings 20000 for a 1/4 share, the total capital of the firm is 80000. The remaining 3/4 share (60000) is divided between X and Y in a 2:1 ratio. X's share is (2/3) * 60000 = 40000, and Y's share is (1/3) * 60000 = 20000.

Multiple choice

Amit and Vijay started a partnership business on 1st April, 2017. Their capital contributions were Rs. 2,00,000 and Rs. 1,50,000 respectively. The Partnership Deed provided that: (a) Interest on capital be allowed @ 10% p.a. (b) Amit to get a salary of 2,000 per month and Vijay 3,000 per month. (c) Profits are to be shared in the ratio of 3 : 2. Profit for the year ended 31st March, 2018 before above appropriations was Rs. 2,16,000. Interest on drawings amounted to Rs. 2,200 for Amit and Rs. 2,500 for Vijay. Which account is prepared to give effect to the above transaction ?

  1. Profit and Loss apprpriation account

  2. Partners Capital Account

  3. Both A & B

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Profit and Loss Appropriation Account records interest on capital, partners' salaries, profit distribution, and interest on drawings. The partners' capital accounts record the resulting credits and debits, so both accounts are used.

Multiple choice

L and M invest Rs 2,00,000 and Rs 1,00,000 respectively in a partnership, and agree to divide profit/loss equally after providing for interest @ 10% per annum on original capital and salaries of Rs 24,000 and Rs 48,000 respectively. How much total amount L would get if the period's net income (before interest and salaries) is Rs 1,78,000 ______________.

  1. Rs 96,000

  2. Rs 89,000

  3. Rs 82,000

  4. Nil
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Net income = 178,000. Interest: L = 20,000, M = 10,000. Salaries: L = 24,000, M = 48,000. Total appropriations = 20k+10k+24k+48k = 102,000. Remaining profit = 178,000 - 102,000 = 76,000. L's share of profit = 38,000. Total for L = 20,000 (int) + 24,000 (sal) + 38,000 (profit) = 82,000.

Multiple choice

The partnership deed provides for a salary of Rs. 7000 per month to partner A. If A withdraws only Rs. 5000 in a month, the remaining Rs. 2000 is __________________________.

  1. Credited to profit and loss (adjustment) account

  2. Credited to the current account of partner a

  3. Credited to salary payable account

  4. Debited to his capital account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Salary due to a partner is an appropriation of profit. If the partner withdraws less than the salary, the remaining amount is credited to their current account as it represents an amount owed to them by the firm.

Multiple choice

Consider the following statements : 1. At the time of admission of new partner undistributed profit or losses are distributed to all partners in new ratio. 2. Profit or loss on revaluation of assets and liabilities is transferred to old partner's capital account in old profit sharing ratio. 3. Goods brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partner's in their new profit-sharing ratio. Which of the above statement/s is/are true ?

  1. Only 1

  2. Only 2

  3. Only 3

  4. 1,2 and 3
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Statement 1 is false because undistributed profits/losses are distributed to old partners in the old ratio. Statement 2 is true as revaluation gains/losses belong to old partners. Statement 3 is false because goodwill brought by a new partner is shared by old partners in their sacrificing ratio, not the new profit-sharing ratio.

Multiple choice

X and Y are partners with capital of Rs. 9,000 and Rs. 10,000, Z is admitted into the firm with 1/3rd share of profit and bring Rs. 12,000 as his share of capital. How the goodwill of the firm would be valued?

  1. Rs. 5000

  2. Rs. 6000

  3. Rs. 10,000

  4. Rs. 12,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Z brings 12,000 for 1/3 share. Total capital of firm = 12,000 * 3 = 36,000. Combined capital of X, Y, Z = 9,000 + 10,000 + 12,000 = 31,000. Goodwill = Total capital - Combined capital = 36,000 - 31,000 = 5,000.

Multiple choice

A and B were partners in a joint venture sharing profits and losses in equal ratio. A supplies goods to the value of Rs. 60,000 and incurs expenses amounting into Rs. 6,000. B supplies goods to the value of Rs. 14,000 and his expenses amount to Rs. 1000. B sells goods on behalf of the joint venture and realizes Rs. 1,00,000. B is entitled to a commission of 5% on sales and settles his account by bank draft. Find out the amount of Bank draft.

  1. Rs. 66,000

  2. Rs. 73,000

  3. Rs. 14,000

  4. Rs. 27,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice

There are three partners in a firm P, Q and R. X is admitted into the firm with 1/4th share of profit with a guaranteed profit of Rs.25,000 p.a. The firm's total profit is Rs.80,000 . What amount would be given to X as his share of profit by the firm.

  1. Rs.25,000

  2. Rs. 20,000

  3. Rs. 15,000

  4. Rs. 22,500
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

X's calculated share of the profit is 1/4 of Rs. 80,000, which equals Rs. 20,000. However, since X is guaranteed a minimum profit of Rs. 25,000, the firm must pay him the guaranteed amount of Rs. 25,000.