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 and B were partners in a joint venture sharing profits and losses in the ratio of 4:1. A supplies goods to the value ofRs. 55,000 and incurs expenses amounting to Rs. 400. B supplies goods to the value of Rs. 14,000 and his expenses amount to Rs. 300. B sells goods on behalf of the joint venture and realizes Rs. 92,000. B is entitled to a commission of 5 per cent on sales. B settles his account by bank draft. What will be the final remittance ?

  1. B will remit Rs. 69,560 to A

  2. A will remit Rs. 69,560 to B

  3. A will remit Rs. 69,000 to B

  4. B will remit Rs. 69,000 to A
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Total expenses = 400 + 300 = 700. Total goods = 55000 + 14000 = 69000. Total cost = 69700. Sales = 92000. Commission = 5% of 92000 = 4600. Net profit = 92000 - 69700 - 4600 = 17700. Profit share: A = 17700 * 4/5 = 14160, B = 17700 * 1/5 = 3540. B receives 14000 (goods) + 300 (expenses) + 4600 (commission) + 3540 (profit) = 22440. B collected 92000. Remittance = 92000 - 22440 = 69560.

Multiple choice

The capital of B & D are Rs.$90,000$ and Rs.$30,000$ respectively with the profit sharing ratio $3:1$. The new ratio is $5:3$. The goodwill is valued Rs.$80,000$ as on the date. Amount payable by a gaining partner to a scarifying partner is
  1. B will pay to D Rs.$10,000$
  2. D will pay to B Rs.$10,000$
  3. B will pay to D Rs.$80,000$
  4. D will pay to B Rs.$80,000$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Old ratio 3:1, new ratio 5:3. B's share changed from 3/4 to 5/8 (gain/sacrifice: 3/4 - 5/8 = 1/8 sacrifice). D's share changed from 1/4 to 3/8 (gain/sacrifice: 1/4 - 3/8 = -1/8 gain). Goodwill is 80,000. D pays B 1/8 of 80,000 = 10,000.

Multiple choice

A & B are partners and decided to take C, the manager as partner on and form $1.1.2015$ C's share of profit after following adjustment was Rs.$8,620$ -Interest on capital $@ 5\%$ p.a. capital of each partner is Rs.$30,000$. -C is credited with salary of Rs.$500$p.m., Rs.$200$ of which was debited to A; Rs.$100$ to B and Rs.$200$ to the firm. Divisible profits have been divided in the ratio of $5:3:2$. Net profit before above appropriation will be ___________________.
  1. Rs.$53,600$
  2. Rs.$50,000$
  3. Rs.$55,600$
  4. Rs.$50,600$
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice

Ram & Rahim partners sharing profits and losses in the ratio of their effective capital. They had Rs.$2,00,000$ and Rs.$1,20,000$ respectively in their capital accounts as on $1$st January, $2012$. Ram introduced a further capital of Rs.$20,000$ on $1$st April, $2012$ and another Rs.$10,000$ on $1$st July, $2012$. On $30$th September, $2012$ Ram withdraw Rs.$80,000$. On $1$st July, $2012$, Rahim introduced further capital of Rs.$60,000$. Calculate the profit sharing ratio of Ram & Rahim.
  1. $4:3$
  2. $3:4$
  3. $2:3$
  4. $3:2$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Calculate the effective capital for each month. Ram: (200,000 * 3) + (220,000 * 3) + (230,000 * 3) + (150,000 * 3) = 600,000 + 660,000 + 690,000 + 450,000 = 2,400,000. Rahim: (120,000 * 6) + (180,000 * 6) = 720,000 + 1,080,000 = 1,800,000. Ratio = 2,400,000 : 1,800,000 = 24 : 18 = 4 : 3.

Multiple choice

C was admitted in a firm with 1/4th share of the profits of the firm. C contributes Rs. 37,500 as his capital, A and B are other partners with the profit sharing ratio as 3:2. Find the required capital of A and B, if capital should be in profit sharing ratio taking C's as base capital.

  1. Rs. 67,500 and Rs. 40,000 for A and B respectively.

  2. Rs. 67,500 and Rs. 45,000 for A and B respectively.

  3. Rs. 80,000 and Rs. 52,500 for A and B respectively.

  4. Rs. 77,500 and Rs. 65,000 for A and B respectively.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

C's share is 1/4, capital 37500. Total capital = 37500 * 4 = 150000. Remaining share for A and B is 3/4. A and B share in 3:2 ratio. A's capital = 150000 * (3/4) * (3/5) = 67500. B's capital = 150000 * (3/4) * (2/5) = 45000.

Multiple choice

Mr.X is admitted into a partnership firm for 1/4th share of profit. The total capital of the old partners stood at Rs. 45,000 after carrying adjustment of goodwill, revaluation of assets and liabilities and transfer of reserves and surplus. If X pays Rs.15,000 as his share of goodwill to the existing partner privately, what would be accounting treatment?

  1. Goodwill A/c to be debited by Rs. 15,000

  2. Goodwill A/c to be debited by Rs. 60,000

  3. No accounting treatment

  4. Credit to goodwill A/c by Rs. 15,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a new partner pays goodwill privately to existing partners, it is outside the books of the partnership firm. Therefore, no accounting entry is required in the firm's books.

Multiple choice

ABC are three partners in a firm, they decided to admit D a fourth partner in the firm with 1/4th share of profit and loss in the firm. Firm decides to revalue the goodwill by capitalizing super profit @10%. What is the goodwill of the firm average profit and normal profit were Rs. 20,000 and 13,000 respectively?

  1. Rs. 70,000

  2. Rs, 75,000

  3. Rs. 7,000

  4. Rs. 13,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Super profit is calculated as Average Profit - Normal Profit, which is 20,000 - 13,000 = 7,000. Goodwill is calculated by capitalizing super profit at 10%, which is 7,000 / 0.10 = 70,000.

Multiple choice

A & B shares profit & loss equally. They admit C as an equal partner and asset were revalued as follow: Goodwill at Rs 30,000 (book value NIL). Stock at Rs 20,000 (book value Rs 12,000); Machinery at Rs 60,000 (book value Rs 55,000). C is to bring in Rs 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill account will not be shown in the books. Find the profit/loss on revaluation to be shared among A, B & C.

  1. 21,500:21,500:0

  2. 6,500:6,500:0

  3. 13,444:14,333:14,333

  4. 4,333:4,333:4,333
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice

A and B are in partnership sharing profits and losses in the ratio of 3: 2. The capitals of A and B remaining after adjustments are Rs. 48,000 and Rs. 36,000 respectively. They admit 'C' as a partner who contributes Rs.21,000 as capital for a 1/5th share of profits to be acquired equally from both A and B. The capital accounts of old partners are to be adjusted by the proportion of C's capital to his share in the business. Calculate the amount of actual cash to be paid off or brought in by A will be ________.

  1. Rs.5,000

  2. Rs.6,000

  3. Rs.4,500

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