A and B our partners in the ratio of 3:2 the form maintains fluctuatin...
Solution:
Given:
Ratio of partnership between A and B = 3:2
Capital account balance as on 31st March 2020 for A = Rs. 160,000
Capital account balance as on 31st March 2020 for B = Rs. 140,000
Drawings during the year for A and B = Rs. 30,000 each
Interest on capital at the rate of 10% per annum
Profit for the year = Rs. 90,000
To find:
Opening capital of partners
Calculation:
Step 1: Calculate the total drawings for the year
Total drawings for the year = Drawings for A + Drawings for B
Total drawings for the year = Rs. 30,000 + Rs. 30,000
Total drawings for the year = Rs. 60,000
Step 2: Calculate the total interest on opening capital for A and B
Interest on opening capital for A = (10/100) x Rs. 160,000 = Rs. 16,000
Interest on opening capital for B = (10/100) x Rs. 140,000 = Rs. 14,000
Total interest on opening capital = Rs. 16,000 + Rs. 14,000
Total interest on opening capital = Rs. 30,000
Step 3: Calculate the total profit for the year after adjusting for interest on capital and drawings
Total profit for the year = Profit for the year - (Total interest on opening capital + Total drawings for the year)
Total profit for the year = Rs. 90,000 - (Rs. 30,000 + Rs. 60,000)
Total profit for the year = Rs. 90,000 - Rs. 90,000
Total profit for the year = Rs. 0
Step 4: Calculate the total capital as on 1st April 2019
Total capital as on 1st April 2019 = Total capital as on 31st March 2020 - Total profit for the year
Total capital as on 1st April 2019 for A = Rs. 160,000 - Rs. 0 = Rs. 160,000
Total capital as on 1st April 2019 for B = Rs. 140,000 - Rs. 0 = Rs. 140,000
Step 5: Calculate the opening capital of partners
Opening capital of A = (3/5) x Rs. 160,000 = Rs. 96,000
Opening capital of B = (2/5) x Rs. 140,000 = Rs. 56,000
Therefore, the opening capital of A and B are Rs. 96,000 and Rs. 56,000 respectively.
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.