A and B are partners in the ratio of 3:2.

27 :- A and B are partners in the ratio of 3 : 2. The firm maintains Fluctuating Capital Accounts and the balance of the same as on 31st March, 2020 amounted to Rs 1,60,000 ad Rs 1,40,000 for A and B respectively. Their drawings during the year were Rs 30,000 each. As per partnership deed, interest on capital @10% p.a. on opening capitals had been provided to them. Calculate the opening capital of partners given that their profit was Rs 90,000. Show your working clearly.

Solution :-

WORKING NOTE 1:- 

Total opening capital of the firm   =   closing capitals of the partners + drawings – profit (including interest of capital)
= 1,60,000 + 1,40,000 + 30,000 + 30,000 – 90,000
 = Rs 2,70,000
Total interest of capital of both the partner on total opening capital of the firm  = 2,70,000 x 10/100
   = Rs 27,000
Distributable profit of the firm = 90,000 – 27,000 = Rs 63,000
A’s share of profit = 63,000 x 3/5 = Rs 37,800
B’s share of profit = 63,000 x 2/5 = Rs 25,200

WORKING NOTE 2 :-

 Let the opening capital be X

Opening capital + Interest on capital = Capital after interest
 X + 10/100 X  =  1,52,200
110/100X = 1,52,200
X = 1,52,200 X 100/110
X = Rs 1,38,363.63

A’s opening capital = Rs 1,38,364
Interest on A’s capital = 1,38,364 x 10% = 13,836.4
= Rs 13,836

Let the opening capital of B  be Y
Opening capital + Interest on capital = Capital after interest
Y + 10/100 Y  =  1,44,800
110/100Y = 1,44,800
Y = 1,44,800 X 100/110
Y = Rs 1,31,636.36

B’s opening capital = Rs 1,31,636
Interest on B’s capital = 1,31,636 x 10% = 13,163.6
= Rs 13,164