Question

Abha and Bharat were partners. They shared profits and losses equally. On 1st April, 2020 their Capital Accounts showed balances of R3,00,000 and R2,00,000 respectively. If the Partnership Deed provided for Interest on Capital @ 10% p.a. and the firm earned a profit of T50,000 for the year ended 31st March, 2021 then the amount of profit to be distributed between the

83.

partners is:

(a) 50,000 (b) 30,000

(C)20,000 (d) Nil​

Answer 1

Answer:

(d) nil

Explanation:

if ur profit id 50,000 then its ans is (D) but u have written T50,000 so by taking it as ur typing error and letting it be 1,50,000 so its ans will be (a)

by applying int.on cap Abha interest will be 300000×10÷100 =30,000 .

and Bharart int.on cap 200000×10÷100=20,000 .

which is equal to profit earned by firm that is 50,000 so nothing will be distributed among partners

Answer 2

Given:

• Abha and Bharat were partners in a firm, sharing profits and losses equally.
• Their capitals were Rs 3,00,000 and Rs 2,00,000 respectively.
• Interest on capital is to be charged at 10% p.a.
• Net profit during the year was Rs 50,000.

To find: The amount of profit to be distributed to the partners.

Answer:

Calculation of interest on capital:

Interest on capital = Capital × (Rate ÷ 100)

For Abha:

• Interest on capital = Rs 3,00,000 × (10 ÷ 100) = Rs 30,000

For Bharat:

• Interest on capital = Rs 2,00,000 × (10 ÷ 100) = Rs 20,000

The interests on capitals are recorded on the debit side of the appropriation account.

Since both the debit and the credit sides are equal, or rather, balanced, there is no profit or loss incurred by the firm.

Therefore, the amount of profit to be distributed between the partners is (d) Nil.

The Profit & Loss Appropriation Account has been attached below.