Question

44. Prepare Capital Accounts of the partners Ajay and Sanjay from the following information, if their capitals
are fluctuating:
Ajay R
Sanjay )
Capitals on 1st April, 2020
4,00.000 3,00,000
Drawings during the year ended 31st March, 2021
50.000
30,000
Interest on Capital
Interest on Drawings -
1,250
750
Share of Profit for the year ended 31st March, 2021
60,000
50.000
Partner's Salary
36,000
Commission
5,000
3,000
5% pa
5% pa​

Answer 1

We are required to make the Capital of the partners Ajay and Sanjay. This we shall prepare as under:

• Capital accounts are the net worth of the owner of the business.
• As this sum consists of two owners the capital account of both the partners ( owners) is calculated.
• As we can see net worth of Ajay is $Rs.4,67,500$
• The net worth of Sanjay is$Rs.3,37,250.$
• This looks like a profitable partnership after evaluating the net worth of the partners.

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Answer 2

What is Capital Accounts?

In accounting, the capital account shows the net worth of a business at a specific point in time. It is also known as owner's equity for a sole proprietorship or shareholders' equity for a corporation, and it is reported in the bottom section of the balance sheet.

Explanation -

We are required to make the Capital of the partners Ajay and Sanjay. This we shall prepare as under:

PARTICULARS                                                            PARTICULARS

                       Ajay           Sanjay                                        Ajay         Sanjay

To drawings   50,000     30,000      To balance b/d    4,00,000  3,00,000

To, interest on   1250        750              To, interest

  drawing                                              on capital             20,000      15000                                                                

                                                                To, share in       60,000      50,000        

To, balance c/d                profit

                                                             To, partners salary 36000

                                                                To, commission    5000         3000

                                ------------ ----------                                -----------    -------------

                           5,21,000    3,68,000                       5,21,000     3,68,000

 

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