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If C’s capital is ₹30,000 and C’s share of profit is ₹6,000, what will be C’s capital under the fluctuating capital method, assuming no other adjustment?

Answer and explanation

Correct answer: ₹36,000 / Thirty-six thousand rupees

Under the fluctuating capital method, the partner’s share of profit is credited directly to the Capital Account. Therefore, the closing capital is calculated as opening capital plus the share of profit, when no other item is given: ₹30,000 + ₹6,000 = ₹36,000. Drawings, interest on drawings, losses or other adjustments could change this amount, but the question states that there is no other adjustment. Option B incorrectly subtracts the profit, option C gives only the profit amount, and option D ignores the profit credit. Consequently, option A, ₹36,000, is correct.

Related tags

Fluctuating CapitalProfit ShareCapital CalculationCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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