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Current Account Dr. Particulars Particulars A (Rs.) B (Rs.) XXX A (Rs.) Cr. B (Rs.) XXX XXX To Drawings A/C To interest on Drawings To
Current Account Dr. Particulars Particulars A (Rs.) B (Rs.) XXX A (Rs.) Cr. B (Rs.) XXX XXX To Drawings A/C To interest on Drawings To Share of Loss To balance c/d XXX XXX XXX By Interest on capital By Salary By Commission By Share of Profit XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX u4 Fluctuating Capital Method In this method, capital account is prepared by taking the opening balance of capital and all the adjustments such as interest on capital drawings, salary etc., are made in the capital account itself. So, the balance would keep changing every year and hence it is termed as 'Fluctuating capital method'. Fluctuating Capital Account Dr. Cr. Particulars X Y Particulars Y (Rs.) (RS.) (Rs.) (Rs.) To Drawings XXX By Balance b/d XXX XXX By Interest on capital To Interest on By Commission Drawings By Salary To Share of Loss XXX XXX By Share of Profit To balance c/d XXX Xxx XXX XXX XXX XXX XXX XXX XXX Fixed capital method Illustration 1 Write up the capital and current accounts of partners A and B from the following: Particulars Capital on 1.1.08 Current Accounts on 1.1.08(Cr.) Drawings during 2008 Interest on drawings Share of Profit for 2008 Interest on Capital Salary A (Rs.) 4,00,000 2,000 80,000 2,000 42.000 6% B (Rs.) 3,50,000 1,000 70,000 1,000 33,000 6% Nill 36.000
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