Question

Amit and Sumit commenced business as partners on 01.04.2014. Amit contributed Rs.40,000 and Sumit Rs. 25,000 as their share of capital. The partners decided to share their profits in the ratio of 2:1. Amit was entitled to salary of Rs. 6,000 p.a. Interest on capital was to be provided @ 6% p.a. The drawings of Rs. 4, 000 was made by Amit and Rs. 8,000 was made by Sumit. The profits after providing salary and interest on capital for the year ended 31st March, 2015 were Rs. 12,000. Draw up the capital accounts of the pa 1. When capitals are fluctuating 2 When capitals are Fixed

Answer 1

Answer: when there was fixed capital partners contribute expenses and entitled for remuneration by opening their current accounts

Explanation:

Answer 2

Explanation:

Dr. profit and loss appropriation account by 40000

cr. Amit current account by 15000

cr. sumit current account by 25000