A and B are partners sharing Profit and Loss in the ratio 3 : 2 having Capital Account balances of ₹ 50,000 and ₹ 40,000 on 1st April, 2017. On 1st July, 2017, A introduced ₹ 10,000 as his additional capital whereas B introduced only ₹ 1,000. Interest on capital is allowed to partners @ 10% p.a. Calculate interest on capital for the financial year ended 31st March, 2018.
Answers
Interest on A's capital= Rs. 5,750
Interest on B's capital = Rs. 4075
Explanation:
Calculation of Interest on A's capital
Date Capital x Period = Product
1.04.17 to 30.6.17 50,000 x 3 = 1,50,000
1.07.17 to 31.03.18 60,000 x 9 = 5,40,000
∴ Sum of product = 6,90,000
Interest on A's capital = 6,90,000 x 10 x 1 = Rs. 5,750
100 12
Calculation of Interest on B's capital
Date Capital x Period = Product
1.04.17 to 30.6.17 40,000 x 3 = 1,20,000
1.07.17 to 31.03.18 41,000 x 9 = 3,69,000
∴ Sum of Product = 4,89,000
Interest on B's capital = 4,89,000 x 10 x 1
100 12
= Rs. 4075