Question 36 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 36 Chapter 2 of +2-A

Question 36 Chapter 2 of +2-A

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/-

Interest on Mohan’s Capital = 16,000 X 8
100

Interest on Mohan’s Capital = 750/-

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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)

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

 

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2 Book 1 min - Question 36 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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