Illustrate how interest on drawings will | Class 12 Accountancy Chapter Accounting for Partnership : Basic Concepts, Accounting for Partnership : Basic Concepts NCERT Solutions

Give two circumstances under which the fixed capitals of partners may change.

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

List the items which may be debited or credited in capital accounts of the partners when:

(i) Capitals are fixed.
(ii) Capital are fluctuating.

Rani and Suman are in partnership with fixed capitals of Rs, 80,000 and Rs.60,000, respectively. During the year 2015-16, Rani withdrew Rs. 10,000 from her capital and Suman Rs. 15,000. Profits before charging interest on capital was Rs. 50,000. Rani and Suman shared profits in the ratio of 3:2. Calculate the amounts of interest on their capitals @ 12% p.a. for the year ended March 31, 2016.

If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?

Mohan and Shyam are partners in a firm. State whether the claim is valid if the partnership agreement is silent in the following matters:

(i) Mohan is an active partner. He wants a salary of Rs. 10,000 per year;
(ii) Shyam had advanced a loan to the firm. He claims interest @ 10% per annum;
(iii) Mohan has contributed Rs. 20,000 and Shyam Rs. 50,000 as capital. Mohan wants equal share in profits.
(iv) Shyam wants interest on capital to be credited @ 6% per annum.

State whether the following statements are true or false:

(i) Valid partnership can be formulated even without a written agreement between the partners;
(ii) Each partner carrying on the business is the principal as well as the agent for all the other partners;
(iii) Maximum number of partners can be 50;
(iv) Methods of settlement of dispute among the partners can’t be part of the partnership deed;
(v) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner;
(vi) Interest on partner’s loan is to be given @ 12% p.a. if the deed is silent about the rate.

Discuss the main provisions of the Indian Partnership Act 1932 that are relevant to partnership accounts if there is no partnership deed.

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

Define Partnership Deed.

What is Capital Fund? How is it calculated?

What is sacrificing ratio? Why is it calculated?

 Why there is need for the revaluation of assets and liabilities on the admission of a partner? 

What is subscription? How is it calculated?

If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?

On what occasions sacrificing ratio is used?

Identify various matters that need adjustments at the time of admission of a new partner.

What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?

What are the different ways in which a partner can retire from the firm?

Why it is necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted?

What is Capital Fund? How is it calculated?

Reproduce the format of Realisation Account.

What are the different ways in which a partner can retire from the firm?

State the order of settlement of accounts on dissolution.

How deficiency of crditors is paid off at the time of dissolution of firm.

Explain the process dissolution of partnership firm?

Distinguish between firm’s debts and partner’s private debts.

State the difference between dissolution of partnership and dissolution of partnership firm.

Write the various matters that need adjustments at the time of retirement of partner/partners.

On dissolution, how will you deal with partner’s loan if it appears on the
(a) assets side of the balance sheet, (b) liabilities side of balance sheet.