# CIE Accounting Paper-2: Specimen Questions 38 - 39 of 103

## Passage

King and Queen commenced business as partners on April 1st 2006. King contributed £80000 and Queen contributed £50000 as capital. Their profit sharing ratio was decided as 2: 1. During the year King withdrew £8000 and Queen withdrew £16000. King was also entitled for salary amounting to £12000. Interest on capital was paid@6%. The profit of the firm after providing for salary and interest on capital was £24000.

## Question number: 38 (3 of 5 Based on Passage) Show Passage

### Write in Short

What will be the capital of King and Queen on 31st March 2007, if fluctuating capital accounts were maintained by the firm?

### Explanation

On 31st March 2007, capital of King is £104800 and capital of Queen is £45000 when the firm maintains fluctuating capital accounts.

 DATE PARTICULARS JF KING QUEEN DATE PARTICULARS JF KING QUEEN Drawings 8000 16000 Cash 80000 50000 Balance C/F 104800 45000 Salary 12000 Interest on capital@6% 4800 3000 Profit & Loss appropriation in the ratio 2: 1 16000 8000 112800 61000 112800 61000

Profit = King = 24000 * 2/3 = 16000

Profit = Queen = 24000 * 1/3 = 8000