DEPARTMENT OF TECHNICAL EDUCATION

GOVERNMENT OF ANDHRA PRADESH

Name : N. SAI RAM
Designation : HEAD OF CCP SECTION
Branch : Commercial and computer practice
Institute : Govt polytechnic for women
Kakinada
Semester : IV
Subject : ACCOUNTANCY - III
Subject Code : CCP-402
Topic : Partnership Accounts
Sub topic : Introduction to Methods of Maintaining
Capitals Accounts
Duration : 50 Minutes
Teaching aids : PPTs, Animations
CCP402.33 1
Partnership Admission

Objective
On Completion of this Period ,you would be
able to know:

 Specimens of Fixed Capital a/c

 Fluctuations of Fixed capital a/c
 Calculation of Introduction of Drawings

CCP402.33 2
Recap

In the previous Class we have already learnt

 The Contents of Partnership Deed

 Maintenance of Capital Accounts
 Entitlements of Partners
 Changes of Partners

CCP402.33 3
Specimen of Partner's Capital A/c under
Fluctuating Capital Method
Dr Cr

PARTICULARS AMT (Rs.) PARTICULARS AMT (Rs.)

By Balance b/d xxx

To Drawings xxx By Int. on capital xxx

A/c

To Interest on xxx By Salaries A/c xxx

Drawings
To profit and xxx By commission xxx
Loss appropriation A/c
A/c
(loss)
By Reserve a/c xxx

By Profit and xxx

Loss Appn. a/c
(Net Profit )
To balance c/d xxx
CCP402.33 4

Total xxx Total xxx

 Specimen of Partner’s Capital A/c under Fixed
Capital Method

Dr Cr

PARTICULARS AMT (Rs.) PARTICULARS AMT (Rs.)

To Balance c/d XXX By Balance b/d XX

(closing bal.) (opening bal.)

TOTAL XXX TOTAL XXX

CCP402.33 5
 Partner’s Current A/C
Dr Cr
PARTICULARS AMT PARTICULARS AMT
(Rs.) (Rs.)

To Drawing By Int. on Capital

a/c
To Int. on By Commission
Drawings
To P&L apprn. By Salary
a/c (loss)
By P&L apprn. A/c
(profit)
Total Total

CCP402.33 6
Calculation Of Interest On Drawings
By Product Method

 Interest to be Charged only when It is agreed

 No interest is to be Charged when there is no

agreement

 If Drawings are made frequently, product method Is

Useful

CCP402.33 7
Illustration 1

 Avinash and Bhargav are Partners in a Business

 Avinash withdrew Rs.4000/- at the end of every
quarter during the year ending 31.3.2008
 The Partnership agreement provided for interest
on drawings @ 10% P.A.
 Calculate interest on Avinash’s Drawings

CCP402.33 8
 Solution

DATE OF AMOUNTs PERIOD FOR PRODUCT

DRAWING WHICH
USED
30.6.2007 4,000 9 MONTHS 36,000

30.9.2007 4,000 3 MONTHS 24,000

31.12.2007 4,000 3 MONTHS 12,000

31.03.2008 4,000 NIL NIL

TOTAL 72000

CCP402.33 9
Solution

Total Products Rate

Interest = x
12 100

72000 10
x
12 100

10
6000 x
100

= 600

CCP402.33 10
Summary

In this session ,we have learnt about

 Methods of Maintaining Capital Accounts

 Fixed Capital Accounts
 Fluctuations Capital Accounts

CCP402.33 11
Assignment
Write the Proforma of Capital Account of Partners
under:
2. Fixed Capital Method
3. Fluctuating Capital Method

CCP402.33 12