Question

A and B are partners. their capital on 1st april 2018 were 30000 and 20000 respectively. interest on capital is payable at the rate of 10% per annum. profit for the year wnded 31st march 2019 were 40000. calculate interest on capital

Answer 1

Answer:

a.5400 b. 3600 interest of capital

Answer 2

Interest on capital

Explanation:

Given:

A's capital = 30,000

B's capital = 20,000

Rate of interest = 10% = 10 / 100 = 0.1

Note: Interest always payable on opening capital of partners.

Computation of interest on A's capital:

Interest on A's capital = A's capital × Rate of interest

Interest on A's capital = 30,000 × 0.1

Interest on A's capital = 3,000

Computation of interest on B's capital:

Interest on B's capital = B's capital × Rate of interest

Interest on B's capital = 20,000 × 0.1

Interest on B's capital = 2,000

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