Question 40 Chapter 2 of +2-A
40. Amit and Bramit started business on 1st April 2018 with capitals of 15,00,000 and 9,00,000 respectively. On 1st October 2018, they decided that their capitals should be 12,00,000 each. The necessary adjustments in capitals were made by introducing or withdrawing by cheque. Interest on capital is allowed @ 8% p.a. Compute interest on capital for the year ended
31st March 2019.
Calculation of Interest on Amit’s Capital
|
Period |
Amount of Amit’s Capital (A) |
Period Left after (B) |
Product |
|---|---|---|---|
| April 01, 2018, to Sep 30, 2018 | 15,00,000 | 6 | 90,00,000 |
| Oct 01, 2018, to March 31, 2019 | 12,00,000 | 6 | 72,00,000 |
| Sum of Product | 1,62,00,000 |
| Interest on Capital | = | Sum of Product | X | Rate of Interest | X 1/12 |
| Interest on Amit’s Capital | = | 1,62,00,000 | X | 8 | X | 1 |
| 100 | 12 |
Interest on Amit’s Capital = 1,08,000/-
|
Period |
Amount of Amit’s Capital (A) |
Period Left after (B) |
Product |
|---|---|---|---|
| April 01, 2018, to Sep 30, 2018 | 9,00,000 | 6 | 54,00,000 |
| Oct 01, 2018, to March 31, 2019 | 12,00,000 | 6 | 72,00,000 |
| Sum of Product | 1,26,00,000 |
| Interest on Capital | = | Sum of Product | X | Rate of Interest | X 1/12 |
| Interest on Bramit’s Capital | = | 1,26,00,000 | X | 8 | X | 1 |
| 100 | 12 |
Interest on Bramit’s Capital = 84,000/-
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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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