Question 42 Chapter 2 of +2-Part-1
42. (Fluctuating Capital a/c’s/ Profit & Loss A/c) A and B are in partnership sharing profits and losses equally. A’s Capital is Rs.10,000 and B’s Capital is Rs.2,000. Profits for the year ended 31st March 2019 are Rs 6,000 before charging interest on drawings. Interest on 5% p.a. is to be charged on drawings which were as follows:
| A | Amount | B | Amount |
| 1st July 2018 | 200 | 1st June 2018 | 100 |
| 1st Aug 2018 | 100 | 1st July 2018 | 100 |
| 1st Sept 2018 | 300 | 1st Sept. 2018 | 50 |
| 1st Nov 2018 | 50 | 1st Oct 2018 | 200 |
| 1st Feb. 2018 | 100 | 1st Dec. 2018 | 300 |
Assuming that the capitals are fluctuating, show the partners capital accounts and profit and loss account.
The solution of Question 42 Chapter 2 of +2 Part-1: –
| Profit and Loss Account A/c |
|||||
| Particulars |
Amount | Particulars |
Amount | ||
| By Profit b/d | 6,000 | ||||
| By interest on drawings: | |||||
| -A | 21.46 | ||||
| -B | 19.38 | 40.84 | |||
| To Net profit transferred to Capital a/cs | |||||
| -A (1/2) | 3,020.42 | ||||
| -B (1/2) | 3,020.42 | 6,040.84 | |||
| 6,040.84 | 6,040.84 | ||||
(a)If capitals are fluctuating :
| Profit and Loss Account A/c |
|||||||
| Particulars |
A | B | Particulars |
A | B | ||
| To Drawings A/c | 750 | 750 | By Profit b/d | 10,000 | 2,000 | ||
| To Interest on Drawings A/c | 21.46 | 19.38 | By net profit | 3,020.42 | 3,020.42 | ||
| To Balance c/d | 12,248.96 | 4251.04 | |||||
| 13,020.42 | 5,020.42 |
13,020.42 | 5,020.42 | ||||
Working Note: –
Calculation of Interest on A’s Drawings:
We will do it with the product method because of partner withdrawal a different amount every time.
| Date |
Amount (A) |
Period Left after(B) | Product (C=A*B) |
| 1-7-18 | 200 | 9 | 1,800 |
| 1-8-18 | 100 | 8 | 800 |
| 1-9-18 | 300 | 7 | 2,100 |
| 1-11-18 | 50 | 5 | 250 |
| 1-2-19 | 100 | 2 | 200 |
| Sum of Product | 5,150 | ||
| Interest on Drawing | = | 5150 | X | 5 | X | 5 |
| 100 | 12 | |||||
| Interest on Drawing | = | 21.46/- |
| Date |
Amount (A) |
Period Left after(B) | Product (C=A*B) |
| 1-7-18 | 100 | 10 | 1,000 |
| 1-8-18 | 100 | 9 | 900 |
| 1-9-18 | 50 | 7 | 350 |
| 1-11-18 | 200 | 6 | 1,200 |
| 1-2-19 | 300 | 4 | 1,200 |
| Sum of Product | 4,650 | ||
| Interest on Drawing | = | 4650 | X | 5 | X | 1 |
| 100 | 12 | |||||
| Interest on Drawing | = | 19.38/- |
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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
