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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
The Capital Accounts of Tisha and Divya showed credit balances of ₹10,00,000 and ₹7,50,000 respectively after taking into account drawings and the net profit of ₹5,00,000. The drawings of the partners during the year ended 31st March, 2025 were: (i) Tisha withdrew ₹25,000 at the end of each quarter; (ii) Divya’s drawings were ₹20,000 on 31st May, 2024, ₹17,500 on 1st November, 2024 and ₹12,500 on 1st February, 2025. Calculate interest on partners’ capitals @ 10% p.a. and interest on partners’ drawings @ 6% p.a. for the year ended 31st March, 2025.
Interest on Drawings:
Tisha (withdrew ₹25,000 at the end of each quarter; total ₹1,00,000; average 4.5 months) = ₹1,00,000 × 6/100 × 4.5/12 = ₹2,250.
Divya – Interest on Drawings (Product Method)
| Date | Drawings (₹) | Months to 31st Mar | Product (₹) |
|---|---|---|---|
| 31st May, 2024 | 20,000 | 10 | 2,00,000 |
| 1st Nov, 2024 | 17,500 | 5 | 87,500 |
| 1st Feb, 2025 | 12,500 | 2 | 25,000 |
| Total | 50,000 | 3,12,500 |
Interest on Divya’s drawings = ₹3,12,500 × 6/100 × 1/12 = ₹1,563 (approx.).
Interest on Capital (opening capital = closing + drawings – share of profit; profit ₹5,00,000 shared equally = ₹2,50,000 each):
Calculation of Opening Capital
| Particulars | Tisha (₹) | Divya (₹) |
|---|---|---|
| Closing Capital | 10,00,000 | 7,50,000 |
| Add: Drawings | 1,00,000 | 50,000 |
| Less: Share of Profit | 2,50,000 | 2,50,000 |
| Opening Capital | 8,50,000 | 5,50,000 |
Interest on capital @ 10%: Tisha = ₹8,50,000 × 10% = ₹85,000; Divya = ₹5,50,000 × 10% = ₹55,000.
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.
This guide covers "T.S. Grewal Class 12 Chapter 1 Q.44 - Accounting for Partnership Firm Fundamentals", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Accounting for Partnership Firm – Fundamentals.
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