# Fixed and Fluctuating Capitals Solutions

This page contains the CBSE accountancy class 12 chapter Accounting for Partnership : Basic Concepts – Fixed and Fluctuating Capitals nuerical questions solutions. You can find the questions/answers/solutions for the chapter 2 of CBSE class 12 accountancy in this page. So is the case if you are looking for CBSE class 12 Commerce related topic Accounting for Partnership : Basic Concepts – Fixed and Fluctuating Capitals nuerical questions solutions. If you’re looking for theoretical questions related to Test Your Understanding, Do It Yourself, Short Answers or Long Answers or Distribution of Profits Solutions or Guarantee of Profit to the Partners Solutions or Past Adjustments Solutions, you can find them at

Accounting for Partnership : Basic Concepts – Fixed and Fluctuating Capitals Solutions
1. Triphati and Chauhan are partners in a firm sharing profits and losses in the ratio of 3:2. Their capitals were ₹ 60,000 and ₹ 40,000 as on April 01, 2015. During the year they earned a profit of ₹ 30,000. According to the partnership deed both the partners are entitled to ₹ 1,000 per month as salary and 5% p.a. interest on their capital. They are also to be charged an interest of 5% p.a. on their drawings, irrespective of the period, which is ₹ 12,000 for Tripathi, ₹ 8,000 for Chauhan. Prepare Partner’s capital/current Accounts when, capitals are fixed.
We need to consider the following two cases.
(a)
Partners’ salaries, Interest on Capital and Interest on Drawings are charged against the profit
(b)
Partners’ salaries, Interest on Capital and Interest on Drawings are distributed out of profit.
It is not explicitly specified in the problem statement that which one of these two methods should be used. So, we’re providing the solution in both the methods. However, note that the default method that should be considered is the one where in the charges are distributed out of profit (b). However, we’re providing here both the methods to get the students acquainted with both of them.

(a) When the Partners’ salaries, Interest on Capital and Interest on Drawings are charged against the profit.

Date
Particulars
J.F.
Amount
Date
Particulars
J.F.
Amount
To Profit Transferred to:
By Profit and Loss A/c
30,000
Tripathi’s Current A/c
18,000
Chauhan’s Current A/c
12,000
30,000
30,000
30,000
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
To Balance c/d
60,000
40,000
By Balance b/d
60,000
40,000
60,000
40,000
60,000
40,000
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
To Drawings A/c
12,000
8,000
By Interest on Capital A/c
3,000
2,000
To Interest on Drawings A/c
600
400
By Partners’ Salaries A/c
12,000
12,000
To Balance c/d
20,400
17,600
By Profit and Loss Appropriation A/c
18,000
12,000
33,000
26,000
33,000
26,000

(b) When the Partners’ salaries, Interest on Capital and Interest on Drawings are distributed out of profit.

Particulars
Amount
Particulars
Amount
To Partners’ Salary
By Profit and Loss A/c
30,000
Tripathi A/c
12,000
By Interest on Drawings
Chauhan A/c
12,000
24,000
Tripathi A/c
600
To Interest on Capital
Chauhan A/c
400
1,000
Tripathi A/c
3,000
Chauhan A/c
2,000
5,000
To Profit Transferred to
Tripathi’s Current A/c
1,200
Chauhan’s Current A/c
800
2,000
31,000
31,000
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
To Balance c/d
60,000
40,000
By Balance b/d
60,000
40,000
60,000
40,000
60,000
40,000
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
Date
Particulars
J.F.
Amount

Tripathi
Amount

Chauhan
To Drawings A/c
12,000
8,000
By Partners’ Salaries A/c
12,000
12,000
To Interest on Drawings A/c
600
400
By Interest on Capital A/c
3,000
2,000
To Balance c/d
3,600
6,400
By Profit and Loss Appropriation A/c
1,200
800
16,200
14,800
16,200
14,800
Working Notes:
Salary:
Salary per month
= ₹ 1,000
Salary per year
= ₹ 1,000 × 12
= ₹ 12,000
Total Salary paid
= ₹ 24,000
Interest on Capital:
Tripathi
{= ₹~60,000 × \dfrac{5}{100}}
= ₹ 3,000
Chauhan
{= ₹~40,000 × \dfrac{5}{100}}
= ₹ 2,000
Total Interest on Capital
= ₹ 5,000
Interest on Drawings:
Tripathi
{= ₹~12,000 × \dfrac{5}{100}}
= ₹ 600
Chauhan
{= ₹ 8,000 × \dfrac{5}{100}}
= ₹ 400
Total Interest on Drawings
= ₹ 1,000
Profit
Net Profit
₹ 30,000
Partners’ Salaries
(₹ 24,000)
Interest on Capital
(₹ 5,000)
Interest on Drawings
₹ 1,000
₹ 2,000
Tripathi’s share
{= ₹~2,000 × \dfrac{3}{5}}
= ₹ 1,200
Chauhan’s share
{= ₹ 2,000 × \dfrac{2}{5}}
= ₹ 800

2. Anubha and Kajal are partners of a firm sharing profits and losses in the ratio of 2:1. Their capital, were ₹ 90,000 and ₹ 60,000. The profit during the year were ₹ 45,000. According to partnership deed, both partners are allowed salary, ₹ 700 per month to Anubha and ₹ 500 per month to Kajal. Interest allowed on capital @ 5%p.a. The drawings during the year were ₹ 8,500 for Anubha and ₹ 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.
We need to consider the following two cases.
(a)
Partners’ salaries, Interest on Capital and Interest on Drawings are charged against the profit
(b)
Partners’ salaries, Interest on Capital and Interest on Drawings are distributed out of profit.
It is not explicitly specified in the problem statement that which one of these two methods should be used. So, we’re providing the solution in both the methods. However, note that the default method that should be considered is the one where in the charges are distributed out of profit (b). However, we’re providing here both the methods to get the students acquainted with both of them.

(a) When the Partners’ salaries, Interest on Capital and Interest on Drawings are charged against the profit.

Particulars
Amount
Particulars
Amount
To Profit Transferred to
By Profit and Loss A/c
45,000
Anubha’s Current A/c
30,000
Kajal’s Current A/c
15,000
45,000
45,000
45,000
Date
Particulars
J.F.
Amount

Anubha
Amount

Kajal
Date
Particulars
J.F.
Amount

Anubha
Amount

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

(b) When the Partners’ salaries, Interest on Capital and Interest on Drawings are distributed out of profit.

Particulars
Amount
Particulars
Amount
To Parterners’ Salaries
By Profit and Loss A/c
45,000
Anubha A/c
8,400
By Interest on Drawings A/c
Kajal
6,000
14,400
Anubha
425
Interest on Capital
Kajal
325
750
Kajal A/c
4,500
Kajal A/c
3,000
7,500
To Profit Transferred to
Anubha’s Capital A/c
15,900
Kajal’s Capital A/c
7,950
23,850
45,750
45,750
Date
Particulars
J.F.
Amount

Anubha
Amount

Kajal
Date
Particulars
J.F.
Amount

Anubha
Amount

Kajal
To Drawings A/c
8,500
6,500
By Balance b/d
90,000
60,000
To Interest on Drawings A/c
425
325
By Partners’ Salaries A/c
8,400
6,000
To Balance c/d
1,09,875
70,125
By Interest on Capital A/c
4,500
3,000
By Profit and Loss Appropriation A/c
15,900
7,950
1,18,800
76,950
1,18,800
76,950
Working Notes:
Salary
Anubha’s monthly salary
= ₹ 700
Anubha’s yearly salary
= ₹ 700 × 12
= ₹ 8,400
Kajal’s monthly salary
= ₹ 500
Kajal’s yearly salary
= ₹ 500 × 12
= ₹ 6,000
Total
= ₹ 14,400
Interest on Capital
Anubha
{= ₹~90,000 × \dfrac{5}{100}}
= ₹ 4,500
Kajal
{= ₹ 60,000 × \dfrac{5}{100}}
= ₹ 3,000
Total
= ₹ 7,500
Interest on Drawings
Anubha
{= ₹ 8,500 × \dfrac{5}{100}}
= ₹ 425
Kajal
{= ₹~6,500 × \dfrac{5}{100}}
= ₹ 325
Total
= ₹ 750
Profit
Net Profit
₹ 45,000
Total Salary
(₹ 14,400)
Interest on Capital
(₹ 7,500)
Interest on Drawings
₹ 750
₹ 23,850
Anubha’s Share
{= ₹~23,850 × \dfrac{2}{3}}
= ₹ 15,900
Kajal’s Share
{= ₹~23,850 × \dfrac{1}{3}}
= ₹ 7,950