Partners Capital Accounts

PARTNERS' capital ACCOUNT
Debit				Credit
Particulars		Saleh	Ammar	Particulars	Saleh	Ammar
Drawings		2000	3000	Opening capital	40000	30000
Interest on Drawings		100	150	Salary	6000	6000
				Interest capital	3200	2400
				Share of profit:	150	100
Balance c/f		47250	35350
Total		49350	38500	Total	49350	38500

Balance Sheet

Asset		Liability		Equity
Land and Building 30000-1500=	28,500	Sundry Creditors	21,000	Cap/ Saleh Ammar	47250 35350
Plant and Machinery 25,000-2500= 22500	22,500	Bills payable	20,000
Furniture	16,000	Outstanding Rent	1,500
Debtors 12,000-600=11400	11,400	Outstanding wages	2,000
Bills Receivable	8,000	Outstanding salary	1,000
Cash	5,500
closing stock	35,000
Prepaid advertising	1,200
Total asset	128100	Total liability	45,500	Total equity	82,600
Asset = liability +equity 128100= (45500+82600) 128100 = 128100

B. Admission of a New Partner

1. Explain any 3 adjustments required at the time of admission of a partner,

1. Calculation of New Profit Sharing Ratio.
2. Revaluation of Assets and Liabilities of the firm

2. Why and how new partner is admitted in partnership business?

From the above Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2012 and Balance Sheet as on that date.