Question

On 1st jan 2019 capital og A and B was rs 200000 and rs 100000. On 1st july 2019 they decided their capital should be rs 150000 each.IOC partners as 10% p.a for 2018 will be??

Answer 1

Answer:

Interest on capital for the year 2018 will be

A : 2,00,000 x 10% = 20,000

B : 1,00,000 x 10% = 10,000

Explanation:

Note : Interest on capital will be allowed only if provided by Partnership deed or mutual agreement.

Answer 2

Given:

Capital as of January 2019

A - 200000

B - 100000

Interest on capital is 10%

They decide to make their capital 150000 each on July 1st 2019.

To find:

Interest charged on capital, for the year 2018

Solution:

Capital as of January 2019

A - 200000

B - 100000

The interest of capital charged = 10%

The interest of capital of A

$interest = 10\% \times 200000$

$interest \: = \frac{10}{100} \times 200000$

$interest = 20000$

The interest of capital of B

$interest = 20\% \times 100000$

$inerest = \frac{10}{100} \times 100000$

$interest = 10000$

Therefore the interest of capital for A is Rs. 20000 and for B it is Rs. 10000 respectively.

NOTE: Interest on capital is still calculated on the previous value of capital of A and B because the new value of capital is only adopted from July 1st 2019.

The above interest is calculated for the year 2018.