Question

December 31st, 2018 after closing of accounts, the capitals of A, B and C stood in the books of firm at 32,00,000, 1.50,000 and 1,00,000. Subsequently, it was discovered that the interest on capital @ 10% per annum had been omitted. The profit for the year amounted to 75,000 and the partner's drawings had been 10,000; 7.500 and 5,000 respectively. Calculate interest on capital.

​

Answer 1

Answer:

"

Answer:

As closing capital is given in the question as interest on capital is allowed on opening capital so we have to calculate opening capital

opening capital = closing capital +drawing. -profit

A = 200000+10000-25000

= 185000

B = 150000+7500-25000=132500

C= 100000+5000-25000= 80000

profit sharing ratio is not given in the questions we assume it equal

so profit of 75000 divided equally between A B C 75000/3 = 25000

interest on capital

A = 185000×10%-18500

B 132500×10% = 13250

C 80000×10%-8000

"