Question 26 Chapter 2 of +2-Part-1
26. (Interest on Capital/Drawings & Profits given) From the following balance sheet of Rich and Poor, calculate interest on capital @10% p.a. for the year ended 31-3-17.
Balance Sheet | |||
Liabilities | Amount | Assets | Amount |
Rich’s Capital | 20,000 | Sundry Assets | 42,000 |
Poor’s Capital | 16,000 | Drawings – Rich | 2,000 |
Profit & Loss Appropriation a/c (2016-17) | 8,000 | ||
44,000 | 44,000 |
During the year ended 31-3-2017 Rich’s drawings were ₹ 3,000 and Poor’s Drawings were ₹ 5,000. Profits during the year were ₹ 12,000.
The solution of Question 26 Chapter 2 of +2 Part-1: –
Calculation of Capital as on 1st April 2016 |
||||
Particulars |
A | B | ||
Capital as on 31st March 2017 | 20,000 | 16,000 | ||
Add: | ||||
Drawings during the year (Poor) | – | 5,000 | ||
Rich’s Drawings (3,000-2,000)(WN1) | 1,000 | – | ||
Less: | ||||
Share in Profit (12,000-8,000)(WN2) | (-2000) | (-2000) | ||
Capital as on 31st March 2016 | 19,000 | 19,000 | ||
Interest on Capital @10% p.a. | 1,900 | 1,900 |
Working Note:
1. Rich’s drawings appearing in B/S Rs.2,000 means that they are still not adjusted out of total drawings of Rs.3,000. Hence, Only Rs.1,000 (i.e. 3,000-2,000) drawings are added back which have already been adjusted.
2. Just like drawings, profits are also not adjusted to the Rs.8,000 appearing in B/S. So, only profit already adjusted i.e. Rs.12,000-8,000 = Rs.4,000 are to be adjusted for calculating opening capital.
Thanks, Please Like and share with your friends
Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Leave a Reply