Question

24. Vinod and Anuj are partners sharing profits equally. Their capitals at the end of 31" March 2020 were Rs.4,20,000 and
Rs.2,64,000 respectively. They made drawings during the year Rs.25,500 and Rs.14,000 and interest on their drawings
was Rs. 2,500 and Rs.2,000. Profit before allowing interest on capital but after charging interest on drawings was
Rs.60,000. Calculate interest on capital @10% p.a. 00 3 March 2021 as provided in the partnership deed.
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Answer 1

Given:

• Vinod and Anuj share profits and losses equally.
• The closing capitals of Vinod and Anuj were Rs 4,20,000 and Rs 2,64,000 respectively.
• The drawings during the year were Rs 25,500 and Rs 14,000 respectively.
• The interests on drawings were Rs 2,500 and Rs 2,000 respectively.
• The profit before charging interests on capitals and after charging interests on drawings was Rs 60,000.

To find: The interests on capitals at 10% p.a.

Answer:

Let's first calculate the profit shares of each partner.

As per the question, the profit was shared equally.

Hence,

Vinod's share = Rs 60,000/2 = Rs 30,000

Anuj's share = Rs 60,000/2 = Rs 30,000

Now that we have the profit shares, let's calculate the opening capital of each partner.

Opening capital = Closing capital + Drawings - Profit

Vinod's opening capital = Rs 4,20,000 + Rs 25,500 - Rs 30,000

Vinod's capital = Rs 4,15,500

Anuj's capital = Rs 2,64,000 + Rs 14,000 - Rs 30,000

Anuj's capital = Rs 2,48,000

Now that we have their opening capitals, let's calculate the interests on capitals.

Interest on capital = Rate × Opening capital

Vinod's interest on capital = 10/100 × Rs 4,15,500

Vinod's interest on capital = Rs 41,550

Anuj's interest on capital =  10/100 × Rs 2,48,000

Anuj's interest on capital = Rs 24,800

Therefore, the interests on capitals of Vinod and Anuj are Rs 41,550 and Rs 24,800 respectively.