Question No 3 Chapter No 2 – USHA Publication 11 Class

Question No 3 Chapter No 2

Question No 3 Chapter No 2

3. Calculate the interest expense for the calendar year 2015, when books are maintained on
(i) cash basis
(ii) Mercantile basis
Interest paid during 2015 Rs 26,000. Interest dur but not paid on dec. 31,2015 was Rs 2,600. Interest payable on Jan. 1,2015 was Rs 6,200

 

The solution of Question No 3 Chapter No 2: –

 

(i) Cash Basis . Interest paid during the year 2016 i.e. Rs 26,000is expense for the year.

(ii) Mercantile basis. Interest expense for the year 2015 is calculated as follows:

 
Particular
Amount
Interest paid during the year   26,000
Add: Interest due but not paid at the end   2,600
    28,600
Less: Commission payable in the beginning of the year   6,200
Interest Expenses   22,400

 

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