Sameer and Yasmin are partners with capitals of Rs.15,00,000 and Rs. 10,00,000 respectively. 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 case: (i) the capitals are fixed, and (ii) the capitals are fluctuating. The books are closed on March 31, every year.


I know that this is a illustration in the textbook, but the solution printed is wrong. So, i want the full correct answer. Pls.

Dear Student,

Please find the corrected solution below.

(a)
 
Partners’ Capital Accounts
Dr. Cr.
Particulars Sameer Yasmin Particulars Sameer Yasmin
Balance c/d 18,00,000 12,00,000 Balance b/d 15,00,000 10,00,000
      Cash/Bank 3,00,000 2,00,000
           
           
           
  18,00,000 12,00,000   18,00,000 12,00,000
           
 
Partners’ Current Accounts
Dr. Cr.
Particulars Sameer Yasmin Particulars Sameer Yasmin
Drawings A/c 30,000 20,000 Interest on Capital A/c 86,250 57,500
Interest on Drawings 1,800 1,200 Salary A/c 20,000  
P/L Appropriation A/c 60,000 40,000 Commission A/c 10,000 7,000
Balance c/d 24,450 3,300      
           
  1,16,250 64,500   1,16,250 64,500
           
 
(b)
 
Partners’ Capital Accounts
Dr. Cr.
Particulars Sameer Yasmin Particulars Sameer Yasmin
Drawings A/c 30,000 20,000 Balance b/d 15,00,000 10,00,000
Interest on Drawings 1,800 1,200 Cash/Bank 3,00,000 2,00,000
P/L Appropriation A/c 60,000 40,000 Interest on Capital A/c 86,250 57,500
Balance c/d 18,24,450 12,03,300 Salary A/c 20,000  
      Commission A/c 10,000 7,000
           
           
  19,16,250 12,64,500   19,16,250 12,64,500
           
 
Note: The interest on capital is wrongly calculated for 6 months in the book, whereas, it should be calculated for 9 months (from July-Mar). 

Calculation of Interest on A's capital

15,00,000 ×5100=Rs 75,0003,00,000 ×5100×912=Rs 11,250Total Interest = Rs 86,250 (75,000 + 11,250)

Calculation of Interest on B's Capital

10,00,000 ×5100=Rs 50,0002,00,000 ×5100×912=Rs 7,500Total Interest= Rs 57,500 (50,000 + 7,500)
 

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