List of top Accountancy Questions on Profit and Loss Account

From the following details, calculate net profit before tax: Net Profit after tax = Rs. 50,000
15% Long-term debt = Rs. 12,00,000
Tax rate = 20%

Simar, Tanvi and Umara were partners in a firm sharing profits and losses in the ratio of 5:6:9. On 31st March, 2024 their Balance Sheet was as follows:

Umara died on 30th June, 2024. The partnership deed provided for the following on the death of a partner: 
 

Abhay and Sujoy entered into partnership on 1st April, 2024 with capitals of \u20b9 80,00,000 and \u20b9 60,00,000 respectively. The partners decided to share profits in the ratio of their capital contribution. They withdrew \u20b9 6,00,000 and \u20b9 4,00,000 respectively during the year. The partners were charged interest on drawings @ 10% per annum as per the provisions of the partnership deed. Abhay\u2019s share of profit was guaranteed by Sujoy at a minimum of \u20b9 3,50,000 per annum. The profit of the firm for the year ended 31st March, 2024 amounted to \u20b9 6,50,000. Prepare Profit and Loss Appropriation Account of the firm for the year ended 31st March, 2024.
Sonia and Shruti were partners in a firm sharing profits and losses in the ratio of 5 : 3. On 1st April, 2023 the balance in their fixed capital accounts were \u20b9 25,00,000 and \u20b9 15,00,000 respectively. The profit of the firm for the year ended 31st March, 2024 was \u20b9 24,00,000. Calculate their share of profit if : (i) the partnership deed is silent as to the payment of interest on capital. (ii) the partnership deed provides for interest on capital @ 10% per annum.

Bittu and Chintu were partners in a firm sharing profit and losses in the ratio of 4:3. Their Balance Sheet as at 31st March, 2024 was as   

On $1^{\text {st }}$ April, 2024, Diya was admitted in the firm for $\frac{1}{7}$ share in the profits on the following terms:

  1. New profit sharing ratio between Bittoo, Chintoo and Diya will be $3:3:1$.
  2. Fixed Assets were found to be overvalued by ₹ 1,40,000.
  3. Creditors were paid ₹ 4,20,000 in full settlement.
  4. Diya brought proportionate capital and ₹ 5,60,000 as her share of goodwill premium by cheque.

Prepare Revaluation Account and Partners' Capital Accounts.

Suman & Lata’s capital = ₹1,50,000 & ₹2,00,000. Interest = 8%
(i) Profit = ₹14,000
(ii) Profit = ₹60,000

From the following information, prepare a Comparative Statement of Profit and Loss for the year ended $31^{\text {st }}$ March, 2024 :

Particulars2023-24 (₹)2022-23 (₹)
Revenue from operations8,00,0004,00,000
Cost of revenue from operations4,00,0002,00,000
Employee benefit expenses1,60,00080,000
Tax Rate50% 

(a) From the following information, calculate Opening Trade Receivables and Closing Trade Receivables :

  • Trade Receivables Turnover Ratio = 4 times
  • Closing Trade Receivables were ₹ 20,000 more than that in the beginning.
  • Cost of Revenue from operations = ₹ 6,40,000.
  • Cash Revenue from operations = $\frac{1}{3}$ of Credit Revenue from Operations
  • Gross Profit Ratio = 20%
Sakshi, Kiara and Gunjan were partners in a firm sharing profits and losses in the ratio of 3:2:1. Kiara retired on 1-4-2023. After all adjustments the amount due to Kiara was Rs 5,00,000. The payment was to be made in two yearly instalments of Rs 2,50,000 each plus interest @ 10 per annum on the unpaid balance. The amount of first instalment paid on 31-03-2024 will be:
Ishan, Jatin and Kapil were partners in a firm sharing profits and losses in the ratio of 5:4:1. Jatin retired and his share was taken up by Ishan and Kapil in the ratio 1:1. The new profit-sharing ratio between Ishan and Kapil after Jatin's retirement will be:

Preet and Saral were partners sharing profits and losses in the ratio of 3:2. On 31st March, 2024 they decided to change their profit sharing ratio to 1:1. On the date of reconstitution goodwill of the firm was valued at Rs 1,00,000. The journal entry for treatment of goodwill on account of change in profit-sharing ratio will be:

Anisha, Deepa, and Charu were partners sharing profits and losses in the ratio of 5:3:2. On 31st March 2024, they decided to change their profit-sharing ratio to 2:3:5. Each partner's gain or sacrifice due to the change in profit-sharing ratio will be:
Pulkit and Ravinder were partners in a firm sharing profits and losses in the ratio of 3:2. Sikander was admitted as a new partner for a \( \frac{1}{5} \) share in the profits of the firm. Pulkit, Ravinder, and Sikander decided to share future profits in the ratio of 2:2:1. Sikander brought Rs 5,00,000 as his capital and Rs 10,00,000 as his share of premium for goodwill. The amount of premium for goodwill that will be credited to the old partners' capital accounts will be:
Calculate Cash Flow from Financing Activities from the following information:
• Buy back of own shares: 1,00,000
• Issue of bonus shares: 50,000
• Current Year Proposed Dividend: 40,000
• Previous Year Proposed Dividend: 10,000
Calculate the amount of Profit after Tax if:
• Revenue from Operations: 4,00,000
• Cost of Revenue from Operations: \(20\%\) of Revenue from Operations
• Tax rate: \(50\%\)
Calculate goodwill on the basis of two years’ purchase of average profit of the last four years. Profit/Loss of the last four years is given below:
• 2020: 1,00,000
• 2021: 1,50,000
• 2022: 2,20,000
• 2023: (70,000)
Additional information: Closing Stock of the year 2022 was overvalued by 20,000.
Ram and Shyam are partners sharing profits/losses equally. They admitted Radha into partnership for \(\frac{1}{3}^{rd}\) share. At the time of her admission, the book value of Machinery was 1,35,000. It was provided at the time of admission that the Machinery was undervalued by \(10\%\). Show its impact on Revaluation A/c?
Reserves and Surplus includes:
(A) Statement of Profits and Loss (Credit Balance) 
(B) Reserve Capital 
(C) Securities Premium Reserve 
(D) Capital Redemption Reserve 
(E) Share Application Money Pending Allotment 
Choose the correct answer from the options given below:
The steps in the Process of Preparing Profit and Loss Appropriation account are :
(A) Transfer the net profit to the credit side of P and L Appropriation A/c
(B) Divide the Profit among partners in the Profit Sharing ratio
(C) Ascertain net profit after providing for all charges
(D) Debit the P and L Appropriation A/c with all appropriations like partners salary etc.
(E) Credit the P and L Appropriation A/c with interest on drawing and deficiency on account of partner’s guarantee of earnings to the firm.
Choose the correct answer from the options given below :
Super profit refers to:
Other income is Rs 5,00,000 which is 25% of the Revenue from operation. Employees benefit Expenses are 30% of the Revenue from operation. Tax rate is 40%. Net profit after tax will be :
Capital employed by a Partnership firm is ₹ 5,00,00. Its average profit is Rs. 60,000. The normal rate of return in similar type of business is 10%. The amount of super profits of the firm will be :-
Which of the following is not a charge against profit ?