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Question
When fixed capital method is adopted by a partnership firm, which of the following items will appear in the capital account?
Options
Additional capital introduced
Interest on capital
Interest on drawings
Share of profit
Solution
Additional capital introduced
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RELATED QUESTIONS
What is meant by the fixed 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 |
| Additional capital introduced | 18,000 | 16,000 |
| Drawings during 2018 – 2019 | 10,000 | 6,000 |
| Interest on drawings | 500 | 300 |
| Share of profit for 2018 – 2019 | 35,000 | 25,800 |
| Interest on capital | 3,500 | 2,500 |
| Salary | Nil | 18,000 |
| Commission | 12,000 | Nil |
Janani, Kamali and Lakshmi are partners in a firm sharing profits and losses equally. As per the terms of the partnership deed, Kamali is allowed a monthly salary of ₹ 10,000 and Lakshmi is allowed a commission of ₹ 40,000 per annum for their contribution to the business of the firm. You are required to pass the necessary journal entry. Assume that their capitals are fluctuating.
Janani, Kamali, and Lakshmi are partners in a firm sharing profits and losses equally. As per the terms of the partnership deed, Kamali is allowed a monthly salary of ₹ 10,000 and Lakshmi is allowed a commission of ₹ 40,000 per annum for their contribution to the business of the firm. You are required to pass the necessary journal entry. Assume that their capitals are fluctuating.
Janani, Kamali and Lakshmi are partners in a firm sharing profits and losses equally. As per the terms of the partnership deed, Kamali is allowed a monthly salary of ₹ 10,000 and Lakshmi is allowed a commission of ₹40,000 per annum for their contribution to the business of the firm. You are required to pass the necessary journal entry. Assume that their capitals are fluctuating.
Janani, Kamali, and Lakshmi are partners in a firm, sharing profits and losses equally. As per the terms of the partnership deed, Kamali is allowed a monthly salary of ₹ 10,000, and Lakshmi is allowed a commission of ₹ 40,000 per annum for their contribution to the business of the firm. You are required to pass the necessary journal entry. Assume that their capitals are fluctuating.
Mani is a partner, who withdrew ₹ 30,000 on 1st September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed.
Janani, Kamali and Lakshmi are partners in a firm sharing profits and losses equally. As per the terms of the partnership deed, Kamali is allowed a monthly salary of ₹10,000 and Lakshmi is allowed a commission of ₹40,000 per annum for their contribution to the business of the firm. You are required to pass the necessary journal entry. Assume that their capitals are fluctuating.
Janani, Kamali and Lakshmi are partners in a firm sharing profits and losses equally. As per the terms of the partnership deed, Kamali is allowed a monthly salary of ₹ 10,000 and Lakshmi is allowed a commission of ₹ 40,000 per annum for their contribution to the business of the firm. You are required to pass the necessary journal entry. Assume that their capitals are fluctuating.
Mani is a partner, who withdrew ₹ 30,000 on 1st September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed.
