Question

$A$ and $B$ are partners in a business and their capitals at the end of the year were $Rs.7,00,000$ and $6,00,000$ respectively. Calculate their opening capitals considering the following information:
(a) Drawings of $A$ and $B$ for the year were $Rs.75,000$ and $Rs.50,000$ respectively.
(b) $B$ introduced capital of $Rs.1,00,000$ during the year.
(c) Interest on capital credited to the Capital Accounts of $A$ and $B$ were $Rs.15,000$ and $Rs.10,000$ respectively.
(d) Interest on drawings debited to the Capital Accounts of $A$ and $B$ were $Rs.7,500$ and $Rs.5,000$ respectively.
(e) Share of loss debited to Capital Accounts was $Rs.20,000$ each.

Answer 1

CALCULATION OF OPENING CAPITAL :

Particulars A B

Closing capital 7,00,000 6,00,000

Add:-Drawings 75,000 50,000

Interest on drawings 7500 5000

Share of loss 20,000 20,000

Less: capital Introduced Nil (1,00,000)

Interest on capital (15,000) (10,000)

Total 7,87,500 5,65,000