Question

Amit and Bhavna start a business on 1st April, 2019 and decide to share profits and losses in the ratio of 3: 2 respectively. They contribute in cash 1.50,000 and 1,20,000 respectively as their initial capitals on 1st April, 2019.

Their drawings during the year are: Amit = 18,000 and Bhavna = 15,750. Interest on capitals is allowed @ 12% p.a. and interest on drawings is to be charged @ 10% p.a.

Amit is to get a salary of 1,875 per month and Bhavna is entitled to get commission @ 2% on net sales which is 5,25,000. The net divisible profit is 1,45,500.

Prepare Partners' Capital Account for the year ended 31st March, 2019 under :

(i) Fixed Capital Method and (ii) Fluctuating Capital Method.

(please solve the answer of question in testbook.)​

Answer 1

Answer:

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