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Question 20 Chapter 2 of +2-Part-1
20. (Calculation of interest on Capital) A and B started business on 1-4-2018 with capitals of Rs.60,000 and Rs.40,000 respectively. During the year, A introduced Rs.10,000 to the firm as additional capital on 1-10-18. They withdrew Rs.500 p.m. for household expenses in lieu of profits . Interest on Capital is to be allowed @ 10% p.a.
Calculate the interest payable to A and B for the year ending 31-3-19.
| Date | Particulars |
Details | Amount | |
|---|---|---|---|---|
| Interest on A’s Capital: | ||||
| On 60,000 @10% for 1 year (60,000 x 10/100) | 3,000 | |||
| On 10,000 @10% for 1/2 year (10,000 x 10/100 x 6/12) | 3,500 | 6,500 | ||
| Interest on B’s Capital: | ||||
| On 40,000 @10% for 1 year (40,000*10/100) | 4,000 | |||
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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