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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(ii) If any part of capital is permanently withdrawn by the partner from the firm.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
Give two circumstances under which the fixed capitals of partners may change.
Anubha and Kajal are partners of a firm sharing profits and losses in the ratio of 2:1. Their capital, were Rs 90,000 and Rs 60,000. The profit during the year were Rs 45,000. According to partnership deed, both partners are allowed salary, Rs 700 per month to Anubha and Rs 500 per month to Kajal. Interest allowed on capital @ 5% p.a. The drawings at the end of the period were Rs 8,500 for Anubha and Rs 6,500 for Kajal. Interest is to be charged @ 5% p.a. on drawings. Prepare partners capital accounts, assuming that the capital account 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'?
Giriija, Yatin, and Zubin were partners sharing profits in the ratio 5 : 3: 2. Zubin died on 1st August 2015. Amount due to Zubin's executor after all adjustments were ₹ 90,300. The executor was paid ₹ 10,300 in cash immediately and the balance in two equal annual installments with interest @ 6% p.a. starting from 31st March 2017. Accounts are closed on 31st March each year. Prepare Zubin's Executors Account until he is finally paid.
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?
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".
What would be the journal entry for charging interest on drawings to the partner's capital accounts?
Partner's Current Accounts are opened when their Capital Accounts are:
When only Partner's Capital Account is maintained all the adjustments are made in ______.
In Fluctuating Capital Method, the capital of a partner ______.
Fluctuating capital account is credited with ______.
