Question

Anubha and Kajal are partners of a firm sharing profits and losses in the ratio of 2:1. Their capital, were Rs 90,000 and Rs 60,000. The profit during the year were Rs 45,000. According to partnership deed, both partners are allowed salary, Rs 700 per month to Anubha and Rs 500 per month to Kajal. Interest allowed on capital @ 5% p.a. The drawings at the end of the period were Rs 8,500 for Anubha and Rs 6,500 for Kajal. Interest is to be charged @ 5% p.a. on drawings. Prepare partners capital accounts, assuming that the capital account are fluctuating.

Answer 1

a) 
Note: If Partners’ Salaries, Interest on capital and Interest on Drawing are treated as these have already adjusted in Profit and Loss Account. The Solution will be as 

Profit and Loss Appropriation Account

Dr                                                                                   Cr.

Particulars		Amount Rs	Particulars		Amount Rs
Profit Transferred to Current  A/c			Profit and Loss		45,000
Anubha’s Capital	30,000	45,000
Kajal’s Capital	15,000
		45,000			45,000

Partners’ Capital Account

Dr.                                                                                 Cr.

Particulars	Anubha	Kajal	Particulars	Anubha	Kajal
Drawings	8,500	6,500	Balance b/d	90,000	60,000
Interest on Drawings	425	325	Partners’ Salaries	8,400	6,000
Balance c/d	1,23,975	77,175	Interest on Capital	4,500	3,000
			Profit and Loss Appropriation	30,000	15,000
	1,32,900	84,000		1,32,900	84,000

b) Alternative 

Note: If Partners’ salaries, interest on capital and interest on drawings adjusted in Profit and Loss Appropriation Account. The solution will be as. 

Profit and Loss Appropriation Account

Dr                                                                                  Cr.

Particulars		Amount Rs	Particulars		Amount Rs
Partners’ Salaries:			Profit and Loss Account		45,000
Anubha	8,400	14,400	Interest on Drawings
Kajal	6,000		Anubha	425	750
Interest on Capital:			Kajal	325
Anubha	4,500	7500
Kajal	3,000
Profit transferred to
Anubha’s Capital	15,900	23,850
Kajal’s Capital	7,950
		45,750			45,750

Partners’ Capital Account

Dr.                                                                                 Cr.

Particulars	Anubha	Kajal	Particulars	Anubha	Kajal
Drawings	8,500	6,500	Balance b/d	90,000	60,000
Interest on Drawings	425	325	Partners’ Salaries	8,400	6,000
			Interest on Capital	4,500	3,000
Balance c/d	1,09,875	70,125	Profit and Loss Appropriation	15,900	7,950
	1,18,800	76,950		1,18,800	76,950