These questions use new partners and new figures. Attempt each on paper, then check the partners’ totals against the net profit.
They follow the partnership worked set. To practise against the clock, use the timed original practice session builder.
Questions
Question 1. State whether each item is an expense or an appropriation: (a) clerk’s wages, (b) partner’s salary, (c) interest on capital, (d) rent, (e) interest on drawings.
Answer
(a) and (d) are expenses. (b), (c) and (e) are appropriations. Interest on drawings is added to profit and charged to the partner.
Question 2. Partners’ capital is P RM50 000 and Q RM30 000, and interest on capital is 5%. Find the interest for each.
Answer
P: 50 000 × 5% = RM2 500. Q: 30 000 × 5% = RM1 500.
Question 3. A partner draws RM4 000 on 1 April and RM2 000 on 1 October. The year ends on 31 December and the rate is 6%. Find the interest on drawings.
Answer
1 April to 31 December is 9 months: 4 000 × 6% × 9/12 = RM180.
1 October to 31 December is 3 months: 2 000 × 6% × 3/12 = RM30.
Total = RM210.
Question 4. Net profit is RM60 000. P has a salary of RM6 000. Interest on capital is P RM2 500 and Q RM1 500.
Interest on drawings is P RM300 and Q RM200. The ratio is 1:1. Prepare the appropriation and find each total.
Answer
Net profit plus interest on drawings = 60 000 + 500 = RM60 500.
Less interest on capital 4 000 and salary 6 000: residual = RM50 500, so each gets 25 250.
P: 2 500 + 6 000 − 300 + 25 250 = RM33 450. Q: 1 500 − 200 + 25 250 = RM26 550.
Check: 33 450 + 26 550 = RM60 000.
Question 5. P’s current account has an opening credit balance of RM3 000. Use the figures from Question 4 and drawings of RM20 000. Find the closing balance.
Answer
Credits: 3 000 + 2 500 + 6 000 + 25 250 = RM36 750.
Debits: 20 000 + 300 = RM20 300.
Closing balance = 36 750 − 20 300 = RM16 450 credit.
Question 6. A student’s totals for net profit RM40 000 are A RM18 000 and B RM20 000. B’s salary is RM2 000. What error explains it?
Answer
The totals add to RM38 000, which is RM2 000 short. That equals B’s salary, so the salary was deducted from profit but not credited to B.
Question 7. Explain why a partner’s salary is not treated as an expense.
Answer
A partner is an owner, not an employee. The salary is an agreed way of sharing profit, so it is appropriated from profit and does not reduce the firm’s net profit.
Question 8. A partner introduces RM8 000 capital on 1 October. Interest on capital is 5% and the year ends on 31 December. State the account and find the interest.
Answer
It is credited to the capital account. Interest for 3 months = 8 000 × 5% × 3/12 = RM100.
If you got these wrong
Questions 1 and 7 point to partner salary versus employee wage. Questions 5 and 8 belong to capital versus current account movements.
Question 3 needs interest on drawings, and questions 4 and 6 need checking the allocation reconciles.
If you want a teacher to go through your working, see online one-to-one Accounting tuition.