2. ď‚–
Particulars Ajith Sajith
Interest on Capital
Drawing (During 2010)
Interest on Drawings
Salary
Commission
Share in loss for the year 2010
5%
22500
1350
15000
7500
45000
5%
15000
900
5250
30000
Ajith and Sajith were partners with capitals of Rs.1000000
and Rs.750000respectively. They agree to share profits in the
ratio of 3:2. Show how the following transactions will be
recorded in the capital accounts of the partners in both the
cases when a) the capital are fixed and b) the capitals are
fluctuating. The books are closed on December 31 every year.
3. ď‚–
Date Particulars Ajith Sajith Date Particulars Ajith Sajith
To Balance c/d 1000000 750000 By Balance b/d 1000000 750000
1000000 750000 1000000 750000
Solution – Under Fixed Capital Method.
Partner’s Capital Account
Dr
Cr
4. ď‚–
Date Particulars Ajith Sajith Date Particulars Ajith Sajith
To Drawings
To Interest on
Drawings
To Profit & loss
Appropriation
(loss)
To Balance c/d
22500
1350
45000
3650
15000
900
30000
-------
By Interest on
capital
By Salary
By Commission
By Balance c/d
50000
15000
7500
37500
-------
5250
3150
72500 45900 72500 45900
Partner’s Current Account
Dr
Cr
5. ď‚–
Date Particulars Ajith Sajith Date Particulars Ajith Sajith
To Drawings
To Interest on
Drawings
To Profit & loss
Appropriation
(loss)
To Balance c/d
22500
1350
45000
1003650
15000
900
30000
746850
By Balance b/d
By Interest on
capital
By Salary
By Commission
1000000
50000
15000
7500
750000
37500
-------
5250
1072500 792750 1072500 792750
Solution – Under Fluctuating Capital Method
Partner’s Capital Account
Dr
Cr
6. ď‚–Anandu and Ravi entered into a partnership
contributing Rs. 50000 and Rs.30000 respectively
and they agreed to share profit and losses in the
ratio 2:1 . Anandu was entitled to a salary of Rs.
5000 p.a. Interest on capital was to be provided
@6% p.a. The drawings of Anandu and Ravi for
the year ending December 31, 2014 were Rs. 6000
& Rs.5000 respectively. Interest on drawings
Anandu Rs. 300 and Ravi Rs. 200 to be charged.
The profit of the firm after providing Anandu’s
salary and interest on capital and taking into
account interest on drawings were Rs. 15000.
Illustration - 2
7. ď‚–
Date Particulars Anandu Ravi Date Particulars Anandu Ravi
To Balance
c/d
50000 30000 By Balance
b/d
50000 30000
50000 30000 50000 30000
When Capitals are Fixed
Partner’s Capital Account
Dr Cr
8. ď‚–Date Particulars Anandu Ravi Date Particulars Anandu Ravi
To Drawings
To Interest on
Drawings
To Balance c/d
6000
300
11700
5000
200
1600
By Interest on
capital
By Salary
By P&L
Appropriation
a/c (Profit)
3000
5000
10000
1800
5000
18000 6800 18000 6800
Partner’s Current Account
Dr Cr
9. ď‚–Date Particulars Anandu Ravi Date Particulars Anandu Ravi
To Drawings
To Interest on
Drawings
To Balance c/d
6000
300
61700
5000
200
31600
By Balance b/d
By Interest on
capital
By Salary
By P&L
Appropriation a/c
(Profit)
50000
3000
5000
10000
30000
1800
5000
68000 36800 68000 36800
When Capital Fluctuating
Partner’s Capital Account
Dr Cr
10. ď‚–
Date Particulars Anandu Ravi Date Particulars Anandu Ravi
To Balance
c/d
75000 45000 By Balance
b/d
By Bank
50000
25000
30000
15000
75000 45000 75000 45000
When Capitals are Fixed
Partner’s Capital Account
Dr Cr
11. ď‚–Date Particulars Anand
u
Ravi Date Particulars Anand
u
Ravi
To
Drawings
To Interest
on
Drawings
To Balance
c/d
6000
300
12450
5000
200
2050
By Interest on
capital
By Salary
By P&L
Appropriation
a/c (Profit)
3750
5000
10000
2250
5000
18750 7250 18750 7250
Partner’s Current Account
Dr Cr
13. ď‚–
Date Particulars Anandu Ravi Date Particulars Anandu Ravi
To Drawings
To Interest
on Drawings
To Balance
c/d
6000
300
87450
5000
200
47050
By Balance
b/d
By Bank
By Interest on
capital
By Salary
By P&L
Appropriation
a/c (Profit)
50000
25000
3750
5000
10000
30000
15000
2250
5000
93750 52250 93750 52250
When Capital Fluctuating
Partner’s Capital Account
Dr Cr
14. ď‚–
Particulars Sajeev (Rs) Rajeev(Rs)
Capitals on 1st January 2011 150000 125000
Drawings 15000 12500
Partner’s Salaries 10000 12000
Partner’s Commission 9000 14000
Interest on Partner’s loan 2500 1000
Interest on Capital 16000 12000
Interest on Drawings 800 500
Share of profit 30000 24000
Current a/c balance 3500(Cr) 3500(Dr)
Illustration – 4
From the following particulars prepare the capital accounts of
partners of Sajeev and Rajeev in both the cases when a) the
capitals are fixed and b) the capitals are fluctuating .
books are closed on 31st December 2011.
15. ď‚–
Date Particulars Sajeev Rajeev Date Particulars Sajeev Rajeev
To Balance
c/d
150000 125000 By Balance
b/d
150000 125000
150000 125000 150000 125000
When Capitals are Fixed
Partner’s Capital Account
Dr Cr
16. ď‚–Date Particulars Sajeev Rajeev Date Particulars Sajeev Rajeev
To Balance b/d
To Drawings
To Interest on
Drawings
To Balance c/d
15000
800
55200
3500
12500
500
44900
By balance b/d
By Interest on
capital
By Salary
By commission
By Interest on
loan
By P&L
Appropriation
a/c (Profit)
3500
16000
10000
9000
2500
30000
12000
12000
14000
1000
24000
71000 63000 71000 63000
Partner’s Current Account
Dr Cr
17. ď‚–Date Particulars Sajeev Rajeev Date Particulars Sajeev Rajeev
To
Drawings
To Interest
on
Drawings
To Balance
c/d
15000
800
199200
12500
500
174000
By Balance
b/d
By Interest
on capital
By Salary
By
commission
By P&L
Appropriation
a/c (Profit)
150000
16000
10000
9000
30000
125000
12000
12000
14000
24000
215000 187000 215000 187000
When Capital Fluctuating
Partner’s Capital Account
Dr Cr
18. ď‚–
Interest on loan is treated as outside liability so is
credited to partner’s current account. But when the
capital account is on fluctuating method, the interest
on loan will be credited to a separate accured interest
account or partner’s loan account.
Note