Question

Following is the extract of the Balance Sheet of Neelkant and Mahadev as on 31st March, 2018.
During the year, Mahadev’s drawings were ₹ 30,000. Profits during the year ended 31st March, 2018 is ₹ 10,00,000. Calculate interest on capital @ 5% p.a. for the year ending 31st March, 2018.

Answer 1

Answer:Intrest on vikash capital = 10,00,000×5% = 50,000

Intrest on mahadev capital = 10,00,000×5% = 50,000

Explanation:

When the capital of partner is fixed drawing and interst does not affect them.

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Answer 2

Interest on capital

Neelkant ₹50,000

Mahadev ₹50,000