Question

4. Afridi and Bhutto started business on 1st April, 2019 with a capital of 8,00,000 and 5,00,000 respectively
sharing profits in the ratio of 3: 2.
On 1st October, 2019, they decided that capital of the firm should be 15,00,000 and it should be shared
by the partners in their profit sharing ratio. Accordingly, they decided to introduce or withdraw their
capital. Interest on capital is allowed at 10% per annum.
Calculate Interest on Capital for the year ending on 31st March, 2020.​

Answer 1

Answer:

interest on afridi's capital = 8,00,000×10/100×6/12 = 40,000

add:- 9,00,000×10/100×6/12 = 45,000

( 15,00,000×3/5 = 9,00,000 from 1st October 2019)

interest on Bhutto's capital = 5,00,000×10/100×6/12 = 25,000

add:- 6,00,000×10/100×6/12 = 30,000

(15,00,000×2/5 = 6,00,000 from 1st October 2019)

total interest on afridi's capital = 40,000+45,000 = 85,000

total interest on Bhutto's capital = 25,000+30,000 = 55,000