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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A and B are partners in the ratio of 3 : 2. The firm maintains Fluctuating Capital Accounts and the balance of the same as on 31st March, 2020 amounted to ₹1,60,000 and ₹1,40,000 for A and B respectively. Their drawings during the year were ₹30,000 each. As per the Partnership Deed, interest on capital @ 10% p.a. on opening capitals had been provided to them. Calculate the opening capitals of the partners, given that their profit was ₹90,000. Show your workings clearly.
Calculation of Opening Capital
| Particulars | A (₹) | B (₹) |
|---|---|---|
| Closing Capital | 1,60,000 | 1,40,000 |
| Add: Drawings | 30,000 | 30,000 |
| 1,90,000 | 1,70,000 | |
| Less: Share of Profit already credited | 37,800 | 25,200 |
| 1,52,200 | 1,44,800 | |
| Less: Interest on Capital already credited | 13,836 | 13,164 |
| Opening Capital | 1,38,364 | 1,31,636 |
Working Notes:
Total of closing capitals = ₹3,00,000; Add drawings ₹60,000 = ₹3,60,000; Less profit ₹90,000 = ₹2,70,000 (= opening capital + interest on capital).
Interest on capital @ 10% on total = ₹2,70,000 × 10% = ₹27,000.
Divisible profit = ₹90,000 – ₹27,000 = ₹63,000, shared in 3 : 2 → A = ₹37,800, B = ₹25,200.
Individual interest (on amount including interest) = balance × 10/110: A = ₹1,52,200 × 10/110 = ₹13,836; B = ₹1,44,800 × 10/110 = ₹13,164.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 1 Q.27 - Accounting for Partnership Firm Fundamentals", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Accounting for Partnership Firm – Fundamentals.
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