(a) From the following information, prepare capital accounts of partners Amutha and Amuthini, when their capitals are fluctuating. | Particulars | Amutha (₹) | Amuthini (₹) | | --- | --- | --- | | Capital on 1st January 2018 [Cr. balance] | 5,00,000 | 4,00,000 | | Drawings during 2018 | 70,000 | 40,000 | | Interest on Drawings | 2,000 | 1,000 | | Share of Profit for 2018 | 52,000 | 40,000 | | Interest on Capital | 30,000 | 24,000 | | Salary | 45,000 | Nil | | Commission | Nil | 21,000 | OR (b) Mani and Madhesh are partners in a firm sharing Profits and Losses in the ratio of 3 : 2. Their Balance Sheet as on 31st March, 2017 is as follows : | Liabilities | ₹ | ₹ | Assets | ₹ | ₹ | | --- | --- | --- | --- | --- | --- | | Capital accounts : | | | Machinery | | 30,000 | | Mani | 40,000 | | Furniture | | 10,000 | | Madhesh | 30,000 | 70,000 | Stock | | 10,000 | | Sundry Creditors | | 30,000 | Debtors | 21,000 | | | | | | Less : Provision for Doubtful debts | 1,000 | 20,000 | | | | | Bank | | 30,000 | | | | 1,00,000 | | | 1,00,000 | Madhu is admitted on 1.4.2017 subject to the following conditions : (i) He has to bring a Capital of ₹ 10,000 (ii) Machinery is valued at ₹ 24,000 (iii) Furniture to be depreciated by ₹ 3,000 (iv) Provision for Doubtful debts should be increased to ₹ 3,000 (v) Unrecorded trade receivables of ₹ 1,000 would be brought into books now. Prepare Revaluation Account and Capital Account of partners after admission.

> > [!TLDR] > (a) Fluctuating capital accounts: Amutha ₹5,55,000, Amuthini ₹4,44,000. (b) Revaluation net loss ₹10,000 shared 3:2; post-admission capitals Mani 34,000, Madhesh 26,000, Madhu 10,000. > > **(a) Capital Accounts (Fluctuating) of Amutha and Amuthini — TN HSC Class-12 Accountancy, Partnership Fundamentals** > > In the fluctuating capital method, everything is routed through one capital account per partner. > > | Dr. Particulars | Amutha (₹) | Amuthini (₹) | Cr. Particulars | Amutha (₹) | Amuthini (₹) | > | --- | --- | --- | --- | --- | --- | > | To Drawings | 70,000 | 40,000 | By Balance b/d | 5,00,000 | 4,00,000 | > | To Interest on drawings | 2,000 | 1,000 | By Interest on capital | 30,000 | 24,000 | > | To Balance c/d | 5,55,000 | 4,44,000 | By Salary | 45,000 | — | > | | | | By Commission | — | 21,000 | > | | | | By Share of profit | 52,000 | 40,000 | > | **Total** | **6,27,000** | **4,85,000** | **Total** | **6,27,000** | **4,85,000** | > > Amutha closing = 5,00,000 + 30,000 + 45,000 + 52,000 − 70,000 − 2,000 = ₹5,55,000. > Amuthini closing = 4,00,000 + 24,000 + 21,000 + 40,000 − 40,000 − 1,000 = ₹4,44,000. > > **(b) Admission of Madhu — Mani and Madhesh (3 : 2) — Revaluation & Capital Accounts** > > Revaluation items: Machinery 30,000 → 24,000 (loss 6,000); Furniture depreciated 3,000 (loss 3,000); Provision for doubtful debts increased 1,000 → 3,000 (loss 2,000); Unrecorded trade receivables ₹1,000 recorded (gain 1,000). > > **Revaluation Account** > > | Dr. Particulars | ₹ | Cr. Particulars | ₹ | > | --- | --- | --- | --- | > | To Machinery A/c | 6,000 | By Trade receivables (unrecorded) A/c | 1,000 | > | To Furniture A/c | 3,000 | By Loss transferred to: | | > | To Provision for doubtful debts A/c | 2,000 | Mani's Capital 6,000 | | > | | | Madhesh's Capital 4,000 | 10,000 | …

(a) From the following information, prepare capital accounts of partners Amutha and Amuthini, when their capit

Question 43 of 43

(a) From the following information, prepare capital accounts of partners Amutha and Amuthini, when their capitals are fluctuating.

Particulars	Amutha (₹)	Amuthini (₹)
Capital on 1st January 2018 [Cr. balance]	5,00,000	4,00,000
Drawings during 2018	70,000	40,000
Interest on Drawings	2,000	1,000
Share of Profit for 2018	52,000	40,000
Interest on Capital	30,000	24,000
Salary	45,000	Nil
Commission	Nil	21,000

(b) Mani and Madhesh are partners in a firm sharing Profits and Losses in the ratio of 3 : 2. Their Balance Sheet as on 31st March, 2017 is as follows :

Liabilities	₹	₹	Assets	₹	₹
Capital accounts :			Machinery		30,000
Mani	40,000		Furniture		10,000
Madhesh	30,000	70,000	Stock		10,000
Sundry Creditors		30,000	Debtors	21,000
			Less : Provision for Doubtful debts	1,000	20,000
			Bank		30,000
		1,00,000			1,00,000

Madhu is admitted on 1.4.2017 subject to the following conditions :

He has to bring a Capital of ₹ 10,000
Machinery is valued at ₹ 24,000
Furniture to be depreciated by ₹ 3,000
Provision for Doubtful debts should be increased to ₹ 3,000
Unrecorded trade receivables of ₹ 1,000 would be brought into books now. Prepare Revaluation Account and Capital Account of partners after admission.

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(a) Fluctuating capital accounts: Amutha ₹5,55,000, Amuthini ₹4,44,000. (b) Revaluation net loss ₹10,000 shared 3:2; post-admission capitals Mani 34,000, Madhesh 26,000, Madhu 10,000.

(a) Capital Accounts (Fluctuating) of Amutha and Amuthini — TN HSC Class-12 Accountancy, Partnership Fundamentals

In the fluctuating capital method, everything is routed through one capital account per partner.

Dr. Particulars	Amutha (₹)	Amuthini (₹)	Cr. Particulars	Amutha (₹)	Amuthini (₹)
To Drawings	70,000	40,000	By Balance b/d	5,00,000	4,00,000
To Interest on drawings	2,000	1,000	By Interest on capital	30,000	24,000
To Balance c/d	5,55,000	4,44,000	By Salary	45,000	—
			By Commission	—	21,000
			By Share of profit	52,000	40,000
Total	6,27,000	4,85,000	Total	6,27,000	4,85,000

Amutha closing = 5,00,000 + 30,000 + 45,000 + 52,000 − 70,000 − 2,000 = ₹5,55,000.

Amuthini closing = 4,00,000 + 24,000 + 21,000 + 40,000 − 40,000 − 1,000 = ₹4,44,000.

(b) Admission of Madhu — Mani and Madhesh (3 : 2) — Revaluation & Capital Accounts

Revaluation items: Machinery 30,000 → 24,000 (loss 6,000); Furniture depreciated 3,000 (loss 3,000); Provision for doubtful debts increased 1,000 → 3,000 (loss 2,000); Unrecorded trade receivables ₹1,000 recorded (gain 1,000).

Revaluation Account

Dr. Particulars	₹	Cr. Particulars	₹
To Machinery A/c	6,000	By Trade receivables (unrecorded) A/c	1,000
To Furniture A/c	3,000	By Loss transferred to:
To Provision for doubtful debts A/c	2,000	Mani's Capital 6,000
		Madhesh's Capital 4,000	10,000

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