- Biru and Kugo are partners sharing profits in a 2:3 ratio. They contributed capital of UGX 2 million and UGX 3 million respectively. They made drawings of UGX 100,000 and UGX 120,000 respectively and Kugo received a salary of UGX 80,000. The partnership earned a net profit of UGX 2.5 million. - Atim and Adongo are partners sharing profits equally. They provided a trial balance as of June 30, 2011 and additional financial information. They need statements of profit/loss and financial position prepared. - Muqadimah and Almuqadimah were partners sharing profits 2:1

1. MAKERERE UNIVERSITY
INTERMEDIATE ACCOUNTING FOR BACHELOR OF COMMERCE AND
BACHELOR OF ENTREPRENEURSHIP & SMALL BUSINESS MANAGEMENT
AY 2014/2015
REVISION QUESTIONS ON PARTNERSHIP ACCOUNTS
Question One
Biru & Kugo are in partnership and according to their deed, interest on capital is 10% and interest on
drawings is 5%. Biru and Kugo contributed Ugx 2,000,000 and Ugx 3,000,000 respectively as
capital. On January 2013, Biru and Kugo made drawings worth Ugx 100,000 and Ugx 120,000
respectively. Kugo was entitled to a salary Ugx80,000. The net profit for the year was Ugx
2,500,000.
Required;
Show how profits were distributed in their respective sharing ratios of 2:3 by 31st December 2013.
Question Two
Atim and Adongo are in partnership sharing profits and losses equally. The following trial balance
was as at 30th June 2011.
Particulars Dr (Ugx ‘000’) Cr (Ugx ‘000’)
Buildings (75,000) 50,000
Fixtures at cost 11,000
Accumulated Depreciation – Fixtures 3,300
Debtors / Creditors 16,243 11,150
Cash 677
Stock 30th June 2010 41,979
Sales 123,650
Purchases 85,416
1 Revision Questions By Juma Bananuka, Accounting Department 2014

2. Carriage outwards 1,288
Discount allowed 115
Interest on loan 4,000
Office expenses 2,416
Salaries & wages 18,917
Bad debts 503
Provision for bad debts 400
Long-term loan 40,000
Capital accounts
Atim 35,000
Adongo 29,500
Current accounts
Atim 1,306
Adongo 298
Drawings
Atim 6,400
Adongo 5,650
Additional information
 Stock on 30th June 2011 was Ugx56,340,000
 Accrued expenses;
 Office expenses Ugx 96,000
 Wages Ugx 200,000
 Depreciate fixtures at 10% per annum on reducing balance. Depreciation on buildings was
Ugx 1,000,000.
 Provision for bad debts is to be decreased to Ugx 320,000
 Interest on drawings was Ugx 180,000and Ugx 120,000
2 Revision Questions By Juma Bananuka, Accounting Department 2014

3.  Interest on capital balance is to be provided for at 10%
 Partnership salary of Ugx 800,000 for Atim is not yet paid.
Required
a) Statement of Profit or Loss for Atim & Adongo partnership for year ended 30th June 2011
b) Statement of financial position as at 30th June 2011
Question Three
Bakiddawo and Nyindo are partners sharing profits and losses equally. They do not maintain proper
books of accounts but the following information was obtained from the available records as at 31
March:
2013 2012
Shs ‘000’ Shs ‘000’
Balance at bank 16,968 9,480
Inventory of goods for sale 48,864 54,120
Trade debtors ? 61,200
Trade creditors 30,576 ?
Furniture 36,000
Motor vehicles (book value) 192,000
Total sales during the year ended 31 March 2013 amounted to Shs 384,912,000 while purchases, all
on credit, for the same period were Shs 295,248,000. On 31 March 2012 Bakiddawo’s capital was
Shs 20,000,000 less than that of Nyindo. The analysis of the cash book for the year ended 31 March
2013 shows the following:
Shs ‘000’
Receipts:
Cash from credit sales 349,152
Additional capital by Bakiddawo 24,000
Cash sales 58,680
3 Revision Questions By Juma Bananuka, Accounting Department 2014

4. Payments:
For purchases 307,008
Salaries 42,000
Rent (for 6 months to 30 September 2012) 14,400
Rates (for 6 months to 30 September 2013) 12,000
Electricity 6,000
Advertising 4,176
Motor vehicle expenses 11,952
Sundry expenses 3,360
Drawings: -Bakiddawo 13,248
-Nyindo 10,200
On 31 March 2013 liabilities were as follows:
Shs ‘000’
Electricity 1,248
Advertisement 624
Sundry expenses 360
On 20 March 2013 the firm decided to dispose of its motor vehicles. One vehicle was sold on credit
for Shs 64,000,000 while the other was taken over by Kefazo at a valuation of Shs 25,000,000. The
combined book value of the two vehicles was Shs 66,000,000. These transactions have not been
recorded in the books.
Depreciation at the rate of 10 percent is to be provided on furniture and motor vehicles on hand at 31
March 2013. No depreciation is to be provided for the vehicles which were disposed of.
Required:
(a) Statement of comprehensive income for the year ended 31 March 2013.
(b) Statement of financial position as at 31 March 2013.
(c) Partners’ capital accounts.
Question Four
A,B,C are partners and have always shared it is and losses in the ratio 4:3:1 respectively. They are
altering the ratio to 3:5:2 respectively. Their balance sheet as 31/12/2006 was;
Net assets 14,000
4 Revision Questions By Juma Bananuka, Accounting Department 2014

5. Capital
A 6000
B 4800
C 3200 14000
The partner is agreed to value good will at ugx12,000 on change
Required;
Prepare;
i. Good will a/c
ii. Capital a/c
iii. Balance sheet if;
a) Using revolution method
b) Using memorandum revolution method
Question Five
Natu & Sight are in partnership sharing profits and losses equally. They decided to admit Travor and
by agreement, goodwill was valued at 6,000,000 and to be introduced in the books. Travor is
required to provide capital equal to that of Sight after he has been credited with his share of goodwill.
The new profit sharing ratio will be 4:3:3 for Natu, Sight, Trevor respectively. The balance sheet
before the admission of Trevor was as follows;
Balance sheet
Noncurrent assets 15,000
Bank 2,000
17,000
Capital
Natu 8,000
Sight 4,000
5 Revision Questions By Juma Bananuka, Accounting Department 2014

6. Current Liabilities 5,000
17,000
Required
Open the ledger accounts to reflect the admission of Trevor and treatment of goodwill using
a) Revaluation method
b) Memorandum revaluations of treating goodwill
c) Show the goodwill account and the balance sheet using (a) and (b)
Question Six
Alan and Brenda have been in partnership for several years, compiling their financial statements for
the year ending 31 March and sharing profits in the ratio 3:2 after allowing for interest on capital
accounts balances at 10% per year.
Extracts from their trial balance at 31 March 2010 are given below:
Notes Shs ‘000’
Capital accounts: Alan 150,000
Brenda 150,000
Current accounts: Alan - Cr 11,400
Brenda - Dr 7,800
Drawings: Alan 145,200
Brenda 110,700
Office equipment: cost 1 144,900
Accumulated depreciation, 1 April 2009 38,400
Inventory, 1 April 2009 2 46,800
Trade receivables 3 205,200
Provision for doubtful debts, 1 April 2009 3 11,400
Sales revenue 1,346,100
Purchases 553,800
6 Revision Questions By Juma Bananuka, Accounting Department 2014

7. Rent paid 4 90,000
Salaries 264,000
Insurance 5 12,000
Sundry expenses 118,200
Notes:
1. Office equipment should be depreciated at 20% per year on the reducing balance basis.
2. Closing inventory amounted to Shs 64,200,000.
3. Debts of Shs 7,200,000 are to be written off, and the allowance for doubtful debts is to be
adjusted to 5% of trade receivables.
4. Rent paid Shs 90,000,000 is the amount for the nine months to 31 December 2009. From that
date rent was increased by 10%.
5. Insurance paid in advance amounted to Shs 4,500,000.
Required:
(a) Prepare the partnership’s statement of comprehensive income and a statement showing the
division of profit among the partners for the year ended 31 March 2010.
(10 marks)
(b) Write up the partners’ current accounts for the year ended 31 March 2010.
(5 marks)
(c) List five points that will apply in the absence of a partnership agreement.
(5
marks)
(Total 20
marks)
Question Seven
Vero and Tio are in partnership operating Happy Teens Nursery School, and share profits and
losses in the ratio of 3:2, respectively. Below is the school’s trial balance as at 31 December 2011:
Dr Cr
7 Revision Questions By Juma Bananuka, Accounting Department 2014

8. Shs 000s Shs
000s
Capital accounts: Vero 90,00
0
Tio 60,00
0
Current accounts: Vero 37,20
0
Tio 22,80
0
Furniture and fittings 22,400
Library books 5,200
Admission fees 3,500
School fees receipts 235,00
0
Salaries and wages 68,900
Meals 82,072
Payables 12,00
0
Commission on sale of uniforms 3,680
Accumulated depreciation 1 Jan 2011:
Furniture and fittings 6,420
Library books 2,100
Donations 40,00
0
Other income 7,600
Rent and utilities 90,600
Stationery 32,488
Transport costs 15,200
General expenses 27,100
15% investment (1 year) 120,000
Bank balance 37,140
8 Revision Questions By Juma Bananuka, Accounting Department 2014

9. Cash balance 600
Drawings: Vero 10,200
Tio 8,400
520,300 520,30
0
Additional information:
(i) The school has 210 pupils, each paying school fees of Shs 1,110,000 per annum (comprising
of 3 terms). In November 2011, 20 pupils paid their school fees for the first term of 2012 at the
rate of Shs 380,000 each,
while some pupils were in arrears at 31 December 2011. All the arrears are receivable in
2012.
(ii) The investment was made on 1 April 2011 for a period of one year. Interest is receivable on
maturity.
(iii) At 31 December 2011, utilities expenses of Shs 1,180,000 were unpaid, while stationery of
Shs 920,000 was unused. These transactions had not yet been accounted for.
(iv) Donations were of a revenue nature.
(v) Depreciation is charged on cost at the rate of 10% per annum on furniture and fittings, and
20% per annum on library books.
(vi) The partners maintain fixed capitals and earn interest on their capital contributions at the rate
of 5% per annum.
Required:
Prepare:
(a) The school fees account for the year 2011. (2 marks)
(b) Income statement for the year ended 31 December 2011. (9 marks)
9 Revision Questions By Juma Bananuka, Accounting Department 2014

10. (c) Partners’ current accounts, in columnar form. (2 marks)
(d) Statement of financial position as at 31 December 2011. (7 marks)
Question Eight
MATOVU, MUSOKE and MUKASA have been partners for some time sharing profits in the ratio of
3:2:1 respectively.
MATOVU, MUSOKE & MUKASA
STATEMENT OF FINANCIAL POSITION AS AT 31ST AUGUST 2014
ASSETS
UGX
Plant & Machinery 200,000
Equipment 300,000
Motor vehicles 250,000
Accounts recievable 100,000
Inventory 500,000
Bank 200,000
Total 1,550,000
EQUITY & LIABILITIES
Capital
MATOVU 600,000
MUSOKE 500,000
MUKASA 300,000 1,400,000
Liabilities
Accounts payable 150,000
Total 1,550,000
10 Revision Questions By Juma Bananuka, Accounting Department 2014

11. On the same date NAMU was admitted to contribute UGX350,000 as capital to share 1/5 of the
profit. The assets were revalued as follows;
UGX
Plant and Machinery 220,000
Equipment 350,000
Motor vehicles 200,000
Provision for bad debts 5% of accounts receivable
Inventory was valued at 450,000
On the retirement of MUSOKE, Goodwill was valued at UGX150,000. The new business of
MATOVU, NAMU & MUKASA decided to eliminate goodwill from the books.
The profit sharing ratios for MATOVU, MUKASA & NAMU was 3:1:1 respectively. MUSOKE is paid
UGX150,000 and the balance remains as a loan.
Required;
To prepare a revaluation a/c, capital a/c, goodwill a/c, any other relevant ledger a/c to reflect the
above transaction & opening balance sheet for MATOVU, MUKASA & NAMU.
Question Nine
Muqadimah & Almuqadimah are partners sharing profits and losses in the ratio of 2:1. On 31st June
2014, they decided to dissolve the partnership. The statement of financial position as at that date
was as below.
MUQADIMAH & ALMUQADIMAH
STATEMENT OF FINANCIAL POSTION AS AT 31ST JUNE 2014
Non – current assets UGX
Land & Buildings 150,000
Furniture 100,000
Motor vehicles 100,000
Current assets
11 Revision Questions By Juma Bananuka, Accounting Department 2014

12. Inventory 150,000
Accounts recievable 200,000
Bank 50,000 400,000
Total Assets 750,000
Capital and liabilities
Capital account
Muqadimah 500,000
Almuqadimah 200,000
700,000
Current account
Muqadimah 100,000
Almuqadimah (300,000)
Accounts payable 250,000
750,000
On that date the following transactions took place. Buildings and furniture realized UGX 170,000 and
UGX 80,000 respectively, motor vehicles were taken over by Muqadimah at UGX 85,000, and
Inventory was taken over by Muqadimah at UGX 130,000. Accounts receivables were factored to
Walugyo at UGX 180,000. The external liabilities were paid off less 5% discount. Realization
expenses amounted to UGX 40,000
Required;
Prepare the following ledger account to close off the books of the partnership
a) Realization account
b) Capital account
c) Bank account
12 Revision Questions By Juma Bananuka, Accounting Department 2014

13. Question Ten
NUWAMANYA, AMANYA, AKAMANYA & NUWE are partners sharing profits and losses in
the ratio 0f 2:1:1:1. On 31st December 2013, they decided to dissolve the partnership. The statement
of financial position is as follows
NUWAMANYA, AMANYA, AKAMANYA & NUWE
STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER 2013
Non – current assets
Plant and machinery 200,000
Equipment 250,000
Motor vehicles 150,000
Current assets
Inventory 90,000
Accounts receivable 80,000
Bank 30,000 200,000
Total Assets
800,000
Capital and liabilities
Capital account
Nuwamanya 300,000
Amanya 200,000
Akamanya 100,000
Nuwe 50,000
Accounts payable 100,000
Current account
Nuwamanya 100,000
Amanya 150,000
Akamanya (120,000)
Nuwe (80,000)
13 Revision Questions By Juma Bananuka, Accounting Department 2014

14. Capital and liabilities
800,000
Assets realized;
UGX
Plant and machinery 170,000
Equipment 260,000
Inventory 80,000
NUWAMANYA took a motor vehicle at UGX 140,000. Accounts receivable realized UGX70,000.
Accounts payables were paid less 21/2% discount. Realization expenses were UGX30,000. Both
AKAMANYA & NUWE are insolvent. AKAMANYA could only bring half of his deficiency.
Required;
a) Realization account
b) Partners capital accounts
c) Bank a/c
14 Revision Questions By Juma Bananuka, Accounting Department 2014