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Question
Give two circumstances under which the fixed capitals of partners may change.
Solution
The following are the two circumstances under which the fixed capitals of partner may change.
(i) If any additional capital is introduced by the partner during the year.
(ii) If any part of capital is permanently withdrawn by the partner from the firm.
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RELATED QUESTIONS
List the items which may be debited or credited in the capital accounts of the partners when:
(i) Capitals are fixed
(ii) Capitals are fluctuating
List the items which may be debited or credited in the capital accounts of the partners when:
(i) Capitals are fixed
(ii) Capitals are fluctuating
Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 2: 3. The following was the balance sheet of the firm as on 31st March 2019.
Balance sheet of Puneet and Akshara as on 31st March 2019
| Liabilities |
Amount(₹) |
Assets |
Amount(₹) |
| Capitals: |
|
Sundry Assets |
2,00,000 |
|
Puneet - 90,000 |
|
|
|
|
Akshara - 1,10,000 |
2,00,000 |
|
|
|
|
2,00,000 |
2,00,000 |
The profits 40,000 for the year ended 31st March 2019 were divided between the partners without allowing interest on capital @ 5% p.a. and commission to Akshara @ ₹ 1,000 per quarter.
The drawings of the partners during the year were :
Puneet ₹ 2,500 per month.
Akshara ₹ 10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the firm.
What is meant by 'Issued Capital'?
What is meant by 'Subscribed Capital'?
Which of the following is true regarding Salary to a partner when the firm maintains fluctuating capital accounts?
Name the methods by which the capital accounts of partners can be maintained?
Under the fluctuating capital method, which of the following account is maintained for each partner.
Anurag and Abhishek are partners sharing profits and losses in the ratio of 3:2. Their capital accounts showed balances of Rs. 1,50,000 and Rs. 2,00,000 respectively on Jan 01, 2003. Show the treatment of interest on capital for the year ending December 31, 2019, in the following statement.
"If the partnership deed is silent as to the payment of interest on capital and the profit for the year is Rs. 50,000".
Anurag and Abhishek are partners sharing profits and losses in the ratio of 3:2. Their capital accounts showed balances of Rs. 50,000 and Rs. 2,00,000 respectively on Jan 01, 2003. Show the treatment of interest on capital for the year ending December 31, 2019, in the following statement.
"If partnership deed provides for interest on capital @8% p.a. and the firm incurred a loss of Rs. 10, 000 during the year".
What would be the journal entry for crediting the partner's salary to the partner's capital account?
What would be the journal entry for charging interest on drawings to the partner's capital accounts?
In Fluctuating Capital Method, the capital of a partner ______.
