Task 1:

Talib and Ali are partners in a firm sharing profits and losses in the ratio of 3:2. Their capitals were OMR 60,000 and OMR 40,000 as on April 01, 2015. During the year they earned a profit of OMR 30,000. According to the partnership deed both the partners are entitled to OMR 1,000 per month as salary and 5% p.a. interest on their capital.

(a) You are required to explain the differences between fixed and fluctuating capital methods (minimum 150 words). (2 marks)