Question

Chapter 2 - Accounting for Partnership Firms-Fundamentals 2.87
Simrat and Bir are partners in a firm sharing profits and losses in the ratio of 3:2. On 31st March, 2019 after
closing the books of account, their Capital Accounts stood at 4,80,000 and 6,00,000 respectively. On
1st May, 2018. Simrat introduced an additional capital of
capital. On 1st October, 2018, Simrat withdrew
1,20,000 and Bir withdrew * 60,000 from his
2,40,000 from her capital and Bir introduced
Interest on capital is allowed at 6% p.a. Subsequently, it was noticed that interest on capital @ 6% p.a.
3,00.000,
had been omitted. Profit for the year ended 31st March, 2019 amounted to * 2,40,000 and the partners'
drawings had been:Simrat-31,20,000 and Bir60,000. Compute the interest on capital if the capitals are
(a) fixed, and (b) fluctuating.
[Ans.: (a) Simrat-35,400; Bir-*27,300; (b) Simrat-
ofit and Loss Appropriation Account and Partners' Capital Accounts
33,960; Bir-* 25,140.]
2. Cand D are partners in a firm; C has contributed
@ 6% p.a. and D is entitled to a salary of 3,000 per month. In the year ended 31st March, 2019, the profit
1,00,000 and D 60,000 as capital. Interest is payable
was 80,000 before interest and salary. Divide the amount between Cand D.
19. Amit and Vijay started a partnership business on 1st April, 2018. Their capital conti
[Ans.: C will get 23,200 and D-756,800.)
2,00,000 and 1.50,000 respectively The Ram​

Answer 1

Answer:

Explanation:

1st case

On fixed capital

Closing balance

simrat : 480000

Bir :  600000

Withdrawal

simrat  240000

Add : 1,20,000

Bir 60000

add: 300000

Total capital

Simrat : 600000

Bir : 360000

Interest on capital (Simrat)

Interest on 600000 for 1 month   3000

Interest on 720000 for 5 month   18000

interest on 480000 for 6 months 14400

Total :  35400

Interest on capital (Bir)

Interest on 360000 for 1 month   1800

Interest on 1300000 for 5 month   7500

interest on 600000 for 6 months 18000

Total :  27300

Case 2

Fluctuating capital

Closing capital           480000          600000

Drawing                      120000             60000

withdrawal                240000               60000

Less                          120000                 300000

less profit                144000                   96000

total                           576000                324000

Calculation on interest

Interest on capital (Simrat)

Interest on 576000 for 1 month   2880

Interest on 696000 for 5 month   17400

interest on 456000 for 6 months 13660

Total :  33960

Interest on capital (Bir)

Interest on 224000 for 1 month   1620

Interest on 264000 for 5 month   6600

interest on 564000 for 6 months 16920

Total :  25140