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Question
Arun and Selvam are partners who maintain their capital accounts under fixed capital method. From the following particulars, prepare capital accounts of partners.
| Particulars | Arun ₹ |
Selvam ₹ |
| Capital on 1st January, 2018 | 2,20,000 | 1,50,000 |
| Current account on 1st January, 2018 | 4,250 (Dr.) | 10,000 (Cr.) |
| Additional capital introduced during the year | Nil | 70,000 |
| Withdrew for personal use | 10,000 | 20,000 |
| Interest on drawings | 750 | 600 |
| Share of profit for 2018 | 22,000 | 15,000 |
| Interest on capital | 1,100 | 750 |
| Commission | 6,900 | Nil |
| Salary | Nil | 6,850 |
Solution
| Dr. | Capital Account | Cr. | |||
| Particulars | Arun | Selvam | Particulars | Arun | Selvam |
| To balance b/d | 2,20,000 | 2,20,000 | By balance c/d | 2,20,000 | 2,20,000 |
| By bank | 70,000 | ||||
| 2,20,000 | 2,20,000 | 2,20,000 | 2,20,000 | ||
| Dr. | Current Account | Cr. | |||
| Particulars | Arun | Selvam | Particulars | Arun | Selvam |
| To balance b/d | 4,250 | By balance b/d | 10,000 | ||
| To Drawings | 10,000 | 20,000 | By share of profit | 22,000 | 15,000 |
| To Interest on Drawings | 750 | 600 | By Interest on capital | 1,100 | 750 |
| To balance c/d | 15,000 | 12,000 | By Commission | 6,900 | |
| By Salary | 6,850 | ||||
| 30,000 | 32,600 | 30,000 | 32,600 | ||
| By Balance b/d | 15,000 | 12,000 | |||
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RELATED QUESTIONS
State the differences between the fixed capital method and fluctuating capital method.
From the following information, prepare capital accounts of partners Rooban and Deri, when their capitals are fixed.
| Particulars | Rooban ₹ |
Deri ₹ |
| Capital on 1st April, 2018 | 70,000 | 50,000 |
| Current account on 1st April, 2018 (Cr.) | 25,000 | 15,000 |
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| Interest on drawings | 500 | 300 |
| Share of profit for 2018 – 2019 | 35,000 | 25,800 |
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Padma ₹ |
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| Interest on drawings | 2,000 | 1,000 |
| Share of profit for 2018 | 52,000 | 40,000 |
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| Commission | Nil | 21,000 |
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