Question

Show how the following will be recorded in the Capital Accounts of the Partners Sohan and Mohan when their capitals are fluctuating:

	Sohan (₹)	Mohan (₹)
Capital on 1st April, 2018	4,00,000	3,00,000
Drawings during the year ended 31st march, 2019	50,000	30,000
Interest on Capital	5%	5%
Interest on Drawings	1,250	750
Share of Profit for the year ended 31st march, 2019	60,000	50,000
Partner's Salary	36,000	.....
Commission	5,000	3,000

Answer 1

Partners’ Capital Accounts
Dr.				Cr.
Particulars	Sohan (₹)	Mohan (₹)	Particulars		Sohan (₹)	Mohan (₹)
Drawings A/c	50,000	30,000	Balance b/d		4,00,000	3,00,000
Interest on Drawings A/c	1,250	750	Interest on Capital A/c		20,000	15,000
			P&L Appropriation A/c		60,000	50,000
Balance c/d	4,69,750	3,37,250	Partners’ Salary		36,000	–
			Commission		5,000	3,000
	5,21,000	3,68,000			5,21,000	3,68,000

Working Note:

Calculation of Interest on Capital