Amit and Sumit are partners sharing profits and losses in the ratio of 3:2. Their capitals at the end of
the year are Rs. 1,50,000 and Rs. 1,80,000 respectively. During the year ended 31 December, 2014,
Amit's drawings and Sumit's drawings were Rs. 25,000 and Rs. 30,000 respectively. Profits (before
allowing interest on capital) during the year were Rs. 60,000. Calculate the interest on the capital @
8% p.a. for the year ended 31 December, 2014.
Answers
Answer:
Amit and Sumit are partners sharing profits and losses in the ratio of 3:2. Their capitals at the end of
the year are Rs. 1,50,000 and Rs. 1,80,000 respectively. During the year ended 31 December, 2014,
Amit's drawings and Sumit's drawings were Rs. 25,000 and Rs. 30,000 respectively. Profits (before
allowing interest on capital) during the year were Rs. 60,000. Calculate the interest on the capital @
8% p.a. for the year ended 31 December, 2014.
Given,
Profit sharing ratio of amit and sumit is 3:2
profit = 60000
Calculation of profit.
Amit = 3÷5×60000 = 36000
Amit profit = 36000
Sumit = 2÷5×60000 = 24000
Sumit profit = 24000
Particular Amit Sumit
Capital on 31Dec2014 150000 180000
Add Drawing 25000 30000
175000 210000
Less profit 36000 24000
Capital on 1Jan2014 139000 186000
Calculation of interest on capital
Amit = 139000×8÷100 = 11120
Sumit = 186000×8÷100 = 14880
hence,
Interest on capital of Amit = 11120
Interest on capital of sumit = 14880