F3 Partnership Ali Sattars

1. P and Q are in partnership, sharing profits equally.

On 30 June 2005, R joined the partnership and it was agreed that fro that date all three
partners should share equally in the profit.
!n the year ended 3" #e$e%er 2005 the profit aounted to &300,000, a$$ruing e'enly
o'er the year, after $harging a %ad de%t of &30,000 whi$h it was agreed should %e %orne
equally %y P and Q only.
(hat should P)s total profit share %e for the year ended 3" #e$e%er 2005*

A & +5,000
B &"22,500
C &"25,000
D &""0,000

2. ,oodwill should ne'er %e shown on the %alan$e sheet of a partnership.
!s this stateent true or false*
A -alse
B .rue
3. / and 0 are in partnership sharing profits and losses in the ratio 312 respe$ti'ely.
Profit for the year was &23,500. .he partners) $apital and $urrent a$$ount %alan$es at the
%eginning of the year were as follows1
/ 0
& &
4urrent a$$ounts 5,5504R ",2004R
4apital a$$ounts "0,0004R 2,0004R
/)s drawings during the year were &6,300, and 0)s were &2,630.
(hat should /)s $urrent a$$ount %alan$e %e at the end of the year*
A &55,350
B &5",+00
C &3",+50
D &53,350

4. 7 and 8 are in partnership, sharing profits equally and preparing their a$$ounts to 3"
#e$e%er ea$h year. On " July
2000, 9 joined the partnership, and fro that date profits are shared 7 60:, 8 60: and 9
20:.
!n the year ended 3" #e$e%er 2000, profits were1
&
3 onths to 3" June 2000 200,000
3 onths to 3" #e$e%er 2000 300,000
!t was agreed that 7 and 8 only should %ear equally the e;pense for a %ad de%t of
&60,000 written off in the si; onths to 3" #e$e%er 2000 in arri'ing at the &300,000
profit.
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F3 Partnership Ali Sattars
(hi$h of the following $orre$tly states 7)s profit share for the year*
Profit share
7
&
A 2"3,000
B 200,000
C 220,000
D 226,000
5. < and . are in partnership and prepare their a$$ounts to 3" #e$e%er ea$h year. On "
July 2000, = joined the partnership.
Profit sharing arrangeents are1
3 onths to 30 June 2000 3 onths to 3"#e$e%er 2000
<alary < &"5,000 &25,000
<hare of %alan$e of profit1 < 30: 60:
. 60: 60:
= 20:
.he partnership profit for the year ended 3" #e$e%er 2000 was &350,000 a$$ruing
e'enly o'er the year.
(hat are the partners) total profit shares for the year ended 3" #e$e%er 2000*
< . =
&000 &000 &000
A "+3 "26 30
B 2"5 "02 25
C "55 "30 35
D "55 "65 35
3. P and Q are in partnership, sharing profits in the ratio 312 and $opiling their a$$ounts
to 30 June ea$h year.
On " January 2002 R joined the partnership, and fro that date the profit>sharing ratio
%e$ae P 50:, Q 25: and R 25:, after pro'iding for salaries for Q and R as follows1
Q &20,000 per year
R &"2,000 per year
.he partnership profit for the year ended 30 June 2002 was &620,000, a$$ruing e'enly
o'er the year.
(hat are the partners) total profit shares for the year ended 30 June 2002*
P Q R
& & &
/ 253,000 "32,000 32,000
0 262,000 "32,000 36,000
4 236,000 "33,000 33,000
# 236,000 "53,000 30,000
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F3 Partnership Ali Sattars
5. P, after ha'ing %een a sole trader for soe years, entered into partnership with Q on "
July 2002, sharing profits equally.
.he %usiness profit for the year ended 3" #e$e%er 2002 was &360,000, a$$ruing e'enly
o'er the year, apart fro a $harge of &20,000 for a %ad de%t relating to trading %efore "
July 2002 whi$h it was agreed that P should %ear entirely.
?ow is the profit for the year to %e di'ided %etween P and Q*
P Q
&000 &000
/ 265 +5
0 250 +0
4 250 +0
# 255 25
2. ,, ? and ! are in partnership, $opiling their a$$ounts for the year to 3" #e$e%er
ea$h year.
.he profit>sharing arrangeents are as follows1
=ntil 30 June 2003
/nnual salaries ? &60,000
! &20,000
0alan$e of profit split , 30:, ? 20:,! 20:
-ro " July 2003
<alaries to %e dis$ontinued, profit to %e di'ided1 , 50:, ? 30:, ! 20:
.he profit for the year ended 3" #e$e%er 2003 was &600,000 %efore $harging partners)
salaries, a$$ruing e'enly through the year and after $harging an e;pense of &60,000,
whi$h it was agreed related wholly to the first si; onths of the year.
?ow should the profit for the year %e di'ided aong the partners*
, ? !
& & &
/ "22,000 "30,000 22,000
0 200,000 ""3,000 26,000
4 "+2,000 ""2,000 22,000
# "20,000 "32,000 22,000
+. 7 and 8 are in partnership, sharing profits in the ratio 21" and $opiling their finan$ial
stateents to 30 June ea$h year. On " January 2006 9 joined the partnership, and it was
agreed that the profit>sharing arrangeent should %e$oe
7 50:, 8 30: and 9 20:.
.he profit for the year ended 30 June 2006 was &560,000, after $harging an e;pense of
&30,000 whi$h it was agreed related to the period %efore " January 2006. .he profit
otherwise a$$rued e'enly o'er the year.
(hat is 7)s total profit share for the year ended 30 June 2006*
/ &305,000
0 &3"2,500
4 &3"5,000
# &2+5,000
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F3 Partnership Ali Sattars
"0. ,, ? and ! are in partnership, sharing profits in the ratio 31"1", after $harging salaries
of &20,000 per year ea$h for ? and !. On " January 2006 they agreed to $hange the profit>
sharing ratio to 3121" and to dis$ontinue ?)s salary. !)s salary $ontinued un$hanged. .he
partnership profit for the year ended 30 June 2006 was &320,000, a$$ruing e'enly o'er
the year.
?ow should the &320,000 profit %e di'ided aong the partners*
, ? !
& & &
/ "+2,000 "06,000 26,000
0 "+2,500 "03,333 26,"35
4 20+,000 "0",333 3+,335
# 20+,000 """,333 2+,335
"". P and Q are in partnership, sharing profits in the ratio 21". On " July 2006 they
aditted P)s son R as a partner. P guaranteed that R)s profit share would not %e less than
&25,000 for the si; onths to 3" #e$e%er 2006. .he profit> sharing arrangeents after
R)s adission were P 50:, Q 30:, R 20:. .he profit for the year ended 3" #e$e%er
2006 is &260,000, a$$ruing e'enly o'er the year.
(hat should P)s final profit share %e for the year ended 3" #e$e%er 2006*
/ &"60,000
0 &"3+,000
4 &""6,000
# &"3+,355

"2. ?ow should interest $harged on partners) drawings appear in partnership finan$ial
stateents*
/ /s in$oe in the in$oe stateent
0 /dded to net profit and $harged to partners in the di'ision of profit
4 #edu$ted fro net profit and $harged to partners in the di'ision of profit
# #edu$ted fro net profit in the di'ision of profit and $redited to partners
"3. P and Q are in partnership, sharing profits equally.
On " January 2005, R joined the partnership and it was agreed that fro that date all
three partners should share equally in the profit.
!n the year ended 30 June 2005 the profit aounted to &300,000, a$$ruing e'enly o'er
the year, after $harging a %ad de%t of &30,000 whi$h it was agreed should %e %orne
equally %y P and Q only.
(hat should %e the partners) total profit shares for the year ended 30 June 2005*
P Q R
& & &
/ +5,000 +5,000 ""0,000
0 "22,500 "22,500 55,000
4 "25,000 "25,000 50,000
# ""0,000 ""0,000 50,000
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F3 Partnership Ali Sattars
"6. / and 0 are in partnership, sharing profits in the ratio 312 and preparing their a$$ounts
to 30 June ea$h year. On
" January 2003, 4 joined the partnership and the profit sharing ratio %e$ae / 60:, 0
30:, and 4 30:.
Profits for the year ended 30 June 2003 were1
&
3 onths ended 3" #e$e%er 2005 300,000
3 onths ended 30 June 2003 650,000
/ %ad de%t of &50,000 was written off in the si; onths to 30 June in $oputing the
&650,000 profit. !t was agreed that this e;pense should %e %orne %y / and 0 only, in their
original profit>sharing ratios.
(hat is /)s total profit share for the year ended 30 June 2003*
&
/ 330,000
0 3"0,000
4 360,000
# 350,000
"5. ?ow should interest $harged on partners) drawings %e dealt with in partnership
finan$ial stateents*
/ 4redited as in$oe in the in$oe stateent
0 #edu$ted fro profit in allo$ating the profit aong the partners
4 /dded to profit in allo$ating the profit aong the partners
# #e%ited as an e;pense in the in$oe stateent.
"3. 7 and 8 are in partnership. .hey share profits equally after $harging a salary &60,000
per year for 7 and interest on $apital at 5: per year.
/t " January 2003 their $apital %alan$es were1
&
7 200,000
8 "00,000
On " July 2003 8 introdu$ed a further &"00,000 $apital, and 7)s salary was dis$ontinued.
.he partnership profit for the year ended 3" #e$e%er 2003 was &335,500.
(hat was 7)s total profit share for the year ended 3" #e$e%er 2003*
&
/ "22,500
0 "52,550
4 "20,000
# "+0,000
"5. (hat dou%le entry is ne$essary to refle$t interest earned on partners $apital a$$ount %alan$es*
/ #e%it Partners $urrent /$$ounts
4redit /ppropriation a$$ount
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F3 Partnership Ali Sattars
0 #e%it /ppropriation /$$ount
4redit Partners $urrent a$ounts
4 #e%it /ppropriation a$$ount
4redit 4ash
# #e%it /ppropriation /$$ount
4redit Partners $apital a$$ounts
"2. / partnership eploys n ine;perien$ed %oo@@eeper. ?e has written up the $urrent a$$ount of
one of the partners as follows.

4urrent /$$ount
!nterest on $apital &2,200 0alan$e %Af &250
<alary &",500 #rawings &3,200
0alan$e $Af &"0,250 Bet Profit &2,500
&"5,"50 &"5,"50
.he %alan$e %rought forward is entered $orre$tly and the other entries are all $orre$t in aount.
?owe'er the %oo@@eeper is not 'ery sure of the differen$e %etween de%its and $redits.
(hat is the $orre$ted %alan$e $arried forward*
/ / de%it %alan$e of &",530
0 / de%it %alan$e of &3,530
4 / $redit %alan$e of &5,050
# / $redit %alan$e of &"3,650
"+. / partner)s pri'ate petrol %ill ha'e %een treated as part of the partnership)s otor 'ehi$le
e;penses. (hi$h of the following entries is ne$essary to $orre$t the error*
/ #e%it #rawings a$$ount
4redit Cotor 'ehi$les e;penses a$$ount
0 #e%it Cotor 'ehi$les e;penses a$$ount
4redit #rawings a$$ount
4 #e%it Cotor 'ehi$les e;penses a$$ount
4redit 4apital a$$ount
# #e%it 4apital a$$ount
4redit Cotor 'ehi$les e;penses a$$ount
20. / and 0 are in partnership. .hey de$ide to let 4 join the partnership on 3" #e$e%er 2072.
On that date the
net %oo@ 'alue of the net assets is &500,000. .he partners agree that the fair 'alue of the net
assets is
&550,000 at 3" #e$e%er 2072. .he %usiness is 'alued at &250,000 %y a fir of 'aluers for the
purposes of
$al$ulating the aount that 4 will pay to %uy a share in the partnership.
(hat is the 'alue of goodwill*
/ &350,000
0 &250,000
4 &"00,000
# &250,000
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F3 Partnership Ali Sattars
21. -aith, ?ope and 4harity are partners sharing residual profits in the ratio 3121". .he partnership
agreeent pro'ides for interest on $apital at the rate of 2: per annu and for a salary for ?ope
of &2,000 per annu. Bet profit for 2075 was &26,000 and the %alan$es on partnersD $apital
a$$ounts during the year were1 -aith &20,000E ?ope &"5,000E 4harity &"2,000.
(hat was 4harityDs share of residual profits for 2075*
/ &"2,060
0 &"2,335
4 &"3,000
# &"6,000
22. !f there is no partnership agreeent, the split of profits %etween the partners is go'erned %y
whi$h of the following*
/ !nternational -inan$ial Reporting <tandards
0 .he =F Partnership /$t
4 Cust %e agreed %etween the partners
23. (hat dou%le entry is ne$essary to refle$t interest paya%le on partnersD drawings*
/ #e%it PartnersD drawings a$$ounts
4redit PartnersD $urrent a$$ounts
0 #e%it Profit and loss appropriation a$$ount
4redit PartnersD drawings a$$ounts
4 #e%it PartnersD drawings a$$ounts
4redit !nterest paya%le a$$ount
# #e%it PartnersD $urrent a$$ounts
4redit Profit and loss appropriation a$$ount
24. !ngrid and <a are in partnership sharing profits and losses in the ratio 316. .he in$oe
stateent for the year to 3" Cay 2073 reported a net profit of &30,50+. !ngrid is entitled to a
salary of &"6,000 per annu. (hat is the <a)s share of the profit for the year to 3" Cay 2073*
A &5,"3"
B &+,562
C &"5,562
D &25,562
25. /le; and Fi are in partnership. !n the year to 3" O$to%er 2073, /le;)s drawings were
&"2,000 and the following entries ha'e %een ade in the partnership appropriation a$$ount for
/le;1
<alary &3,500
!nterest on drawings &",200
<hare of Profit &"2,550
/t " Bo'e%er 2005, the %alan$e on /le;)s $urrent a$$ount was &26,200 G $redit H
(hat is the %alan$e on /le;)s $urrent a$$ount at 3" O$to%er 2073*
A &26,250
B &25,250
C &62,250
D &65,250
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