Advertisement
Question 36 Chapter 2 of +2-A
Advertisement
36. Ram and Mohan are partners in a business. Their capitals at the end of the year were 24,000 and 18,000 respectively. During the year, Ram’s drawings and Mohan’s drawings were 4,000 and 6,000 respectively. Profit before charging interest on capital during the year was 16,000. Calculate interest on capital @ 5% p.a. for the year ended 31st March 2019.
The solution of Question 36 Chapter 2 of +2-A:
Calculation of Interest on Long’s and Mohan’s Capital by Simple Method
Period | Amount of Long’s Capital | Amount of Short’s Capital |
| Capital at the end | 1,20,000 | 1,40,000 |
| Less: Profit already Distributed (1: 1) | 25,000 | 25,000 |
| Add: Drawings During the year | 40,000 | 50,000 |
| Capital at the beginning | 1,35,000 | 1,65,000 |
Interest on Capital = Opening Capital X Rate of Interest
| Interest on Long’s Capital | = | 1,35,000 | X | 8 | |
| 100 |
Interest on Long’s Capital = 10,800/-
Advertisement-X
| Interest on Mohan’s Capital | = | 16,000 | X | 8 |
| 100 |
Interest on Mohan’s Capital = 750/-
Thanks, Please Like and share with your friends
Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
Advertisement-X
