Question

A&B are partners in the ratio of 3 : 2. The firm maintains fluctuating capital accounts and the balance of the same as on 31-03-2020 amounted to Rs. 1,60,000 and Rs. 1,40,000 for A and B respectively. Their drawings during the year were Rs. 30,000 each.

As per partnership deed interest on capital @10% p.a. on opening capitals had been provided to them. Calculate opening capitals of partners given that their profits were Rs. 90,000. Show your workings clearly.

Answer 1

Calculation of opening Capital

Working Notes:

Interest on Capital @10 p.a. 2,70,000 is 27,000

Divisible Profits = 90,000 - 27,000 = 63,000

Distribution of profits

A = 63,000 × 3/5 = 37,800

B = 63,000 × 2/5 = 25,200

Answer 2

Calculation of Opening Capital

Workings:

Comments

How interest on capital calculated??

---

as we have the total divisible profits now we can distribute them in the given psr i.e 3:2. so now we have our separate profits so we can calculate opening cap.=closing+drawings-profit; separately for a and b and then on the oc, ioc can be calculated oc*rate/100 and you will get your answer.
hope it helps!

---

How profit is calculated

---

How profit 37800 is calculated

---

Interest on Capital @10 p.a. 2,70,000 is 27,000

Divisible Profits = 90,000 - 27,000 = 63,000

Distribution of profits

A = 63,000 × 3/5 = 37,800

B = 63,000 × 2/5 = 25,200

---

Bro IOC will be calculated after subtracting the divisible profit by multiplying the amt by 10/110 bcz 10 % is IOC