Question

2. K, P and H share profits in a partnership firm in the ratio of 5:3:2 with fixed capitals of

Rs.40,000; Rs30,000 and Rs.10,000 respectively. Partners are entitled to interest on their

capitals @10% p.a. During the year, the firm earned a profit of Rs.6,000. Find the amount of

interest on capital payable to K, P and H respectively.​

Answer 1

Answer:

Interest on capital

K. P. H total

4000. 3000. 1000. = 8000

But profit available is 6000

Profit is less than interest on capital

so profit of 6000 divided in 4:3:1 (capital ratio)

Interest on capital paid to partners as

K = 6000×4/8=3000

P = 6000×3/8=2250

H = 6000×1/8=750