Question 19 Chapter 2 - Unimax Class 12 Part 1 - 2021

Question 19 Chapter 2 – Unimax Class 12 Part 1

Table of Contents

The solution of Question 19 Chapter 2 – Unimax Class 12 Part 1:

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

19. Form the following Balance Sheet of A and B as on 31st March, 2021. Calculate interest on capital @ 5% per annum payable to B for the year ended 31st March, 2021.

Liabilities	Amount	Assets	Amount
A’s Capital	10000	Sundry Assets	24000
B’s Capital	8000
Profit and Loss Appropriation A/c (2020-21)	6000
	24000		24000

During the year B’s drawings were Rs. 2000. Profit during year ended 31st March, 2021 was Rs. 7000.

The solution of Question 19 Chapter 2 – Unimax Class 12 Part 1:

Calculation of Interest on B’s capital for the year ended 31st March, 2006

B’s capital as on 31.3.2006	Rs.
Add : Drawings during 2005-2006	8000
Less : Profit already credited during 2005-2006	2000
(1/2 of (7000-6000))	10000
Capital as on 1st April, 2005	500
Interest on capital = Rs. 9500 x 5% = Rs. 475	9500