Question 16 Chapter 2 of +2-Part-1
16. (Capital a/c’s/Interest on Drawings) Prepare Capital accounts of partners Muthu and Krishnan from the following information, assuming that their capitals are fluctuating:
| Muthu | Krishnan | |
| Capital on 1-4-18 | 50,000 | 35,000 |
| Drawings during 2018-19 | 2,400 | 1,200 |
| Interest on Capital | 6% | 6% |
| Interest on Drawings | 6% | 6% |
| Share in profits for 2018-19 | 7,000 | 5,000 |
| Salary | …. | 1,800 |
| Commission | 1,000 | ….. |
The solution of Question 16 Chapter 2 of +2 Part-1: –
| Partners’ Capital Accounts | |||||||
| Particulars |
Muthu | Krishnan | Particulars |
Muthu | Krishnan | ||
| To Drawings A/c | 2,400 | 1,200 | By Balance B/d | 50,000 | 35,000 | ||
| To Interest on Drawings A/c | 78 | 33 | By Share in profits | 7,000 | 5,000 | ||
| By Interest on Capital A/c | 3,000 | 2,100 | |||||
| By Salary | – | 1,800 | |||||
| By Commission | 1,000 | – | |||||
| To Balance c/d | 58,522 | 42,667 | |||||
| 61,000 | 43,900 |
61,000 | 43,900 |
||||
Working Notes: –
Calculation of interest on partner’s Drawings
If partners withdrawal the same amount of drawing on a regular basis then we can calculate the interest on drawing with help of following formula: –
Interest on Drawing = Total Drawings X Rate of Interest X Period/12 Months
Rate of Interest = 6%
Period = the period/time will be calculated with the help of following formula: –
| Period | = | Time left after 1st withdrawal | + | Time left after Last withdrawal |
| 2 | ||||
1. Calculation of interest on Muthu’s Drawings:
Muthu’s withdrawal at the beginning of every month = 200 p.m. Therefore, total drawings of the year= Rs.2,400.
It means 1st withdrawal has made on 01-04-2018
So, Time left from 1-4-2018 to 1-3-19 in 12 Months
And last withdrawal has made on 1-3-2019
So, Time left from 1-3-2019 to 31-3-2019 is 1 month.
Now, 0put this time period in the formula
| Period | = | 11 | + | 1 |
| 2 | ||||
| Period | = | 13 | ||
| 2 | ||||
| Period | = | 6.5 |
Total Drawings = 2,400
| Interest on Drawing | = | 2,400 | X | 6 | X | 6.5 |
| 100 | 12 | |||||
| Interest on Drawing | = | 78 |
2. Calculation of interest on Krishnan’s Drawings:
Muthu’s withdrawal at the end of every month = 100 p.m. Therefore, total drawings of the year = Rs.1,200.
It means 1st withdrawal has made on 31-04-2018
So, Time left from 31-4-2018 to 31-3-19 in 11 Months
And last withdrawal has made on 31-3-2019
So, Time left from 31-1-3-2019 to 31-3-2019 is 0 months.
Now, put this time period in the formula:
| Period | = | 11 | + | 0 |
| 2 | ||||
| Period | = | 11 | ||
| 2 | ||||
| Period | = | 5.5 |
Total Drawings = 1,200
| Interest on Drawing | = | 1,200 | X | 6 | X | 5.5 |
| 100 | 12 | |||||
| Interest on Drawing | = | 33 |
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Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
