Calculation for Opening Capital
Interest is allowed on opening capital of the partners. In case there is not further introduction of capital or withdrawal of capital, opening capital is the previous year’s closing capital. If not given in the question it needs to be calculated by making certain adjustment.
(A) UNDER FLUCTUATING CAPITAL METHOD
(b) Under Fixed Capital Method
Note: It can also be calculated by preparing Capital Account in case of Fluctuating Capital Method.
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