2. A. Show how the following items will appear in the capital accounts of the partners Ali and Ahmed when their capital is a) fixed b) fluctuating. Particulars All (RO) Ahmed (RO) Capital on 1.4.2019 90,000 70,000 Drawings during 2019-2020 12,000 9,000 Interest on drawings 360 270 Interest on capital 5,400 4,200 Partner's salary 12,000 Commission 6,000 Share of profit for 2019-20 6,000 4,000 B. Rima and Sami were partners in a firm sharing profits in the ratio of their capitals contributed on commencement of business which were RO. 240,000 and RO. 180,000 respectively. The firm stared business on April 1, 2019. According to the partnership agreement interest on capital and drawings are 12% and 10% p.a. respectively. Rima and Sam are to get a monthly salary of RO. 6,000 and RO. 9,000 respectively. The profits for year ended March 31, 2020 before making above appropriation was RO. 300,900. The drawings of Rima and Sam were RO. 120,000 and RO. 150,000, respectively. Interest on drawings amounted to RO. 6,000 for Rima and RO 7,500 for Sam. Prepare Profit and Loss Appropriation Account and partners' capital accounts assuming that their capitals are fluctuating. C. The average net profits expected in future by Khadija and Co. are RO. 90,000 per year. The total assets of the firm amounted to RO. 990,000 and liabilities are RO. 190,000. The normal rate of return on the capital employed in similar business is 10%. Calculate goodwill of the firm under Super Profit Method on the basis of two-year purchase and Capitalization Method. 2. A. Show how the following items will appear in the capital accounts of the partners Ali and Ahmed when their capital is a) fixed b) fluctuating. Particulars All (RO) Ahmed (RO) Capital on 1.4.2019 90,000 70,000 Drawings during 2019-2020 12,000 9,000 Interest on drawings 360 270 Interest on capital 5,400 4,200 Partner's salary 12,000 Commission 6,000 Share of profit for 2019-20 6,000 4,000 B. Rima and Sami were partners in a firm sharing profits in the ratio of their capitals contributed on commencement of business which were RO. 240,000 and RO. 180,000 respectively. The firm stared business on April 1, 2019. According to the partnership agreement interest on capital and drawings are 12% and 10% p.a. respectively. Rima and Sam are to get a monthly salary of RO. 6,000 and RO. 9,000 respectively. The profits for year ended March 31, 2020 before making above appropriation was RO. 300,900. The drawings of Rima and Sam were RO. 120,000 and RO. 150,000, respectively. Interest on drawings amounted to RO. 6,000 for Rima and RO 7,500 for Sam. Prepare Profit and Loss Appropriation Account and partners' capital accounts assuming that their capitals are fluctuating. C. The average net profits expected in future by Khadija and Co. are RO. 90,000 per year. The total assets of the firm amounted to RO. 990,000 and liabilities are RO. 190,000. The normal rate of return on the capital employed in similar business is 10%. Calculate goodwill of the firm under Super Profit Method on the basis of two-year purchase and Capitalization Method
