Question

On 31st March, 2021, the balances in the Capital Accounts of Aditi and Chanda after
making adjustments for profit and drawings were ₹4,00,000 and ₹2,50,000
respectively. Subsequently, it was discovered that the interest on capital had been
omitted. The profit for the year ended ib 31st March 2021 was Rs,1,50,000.
During the year, Aditi and Chanda each withdrew ₹5,000 per month.
Interest on capital was to be allowed @10% per annum.
The profit sharing ratio of partners was 2:1.
Interest on Capital will be

Answer 1

Answer:

nsns

Explanation:

don't put so lengthy questions nxndnd

Answer 2

The interest on capital will be Rs. 40,000 for Aditi and Rs. 25000 for Chanda.

Given:

Aditi - Rs. 4,00,000

Chanda Rs. 2,50,000

Drawings - 5000 per month each

Profit of the year - Rs. 1,50,000

Interest on capital -10% per annum

Profit-sharing ratio - 2:1

To find:

The interest in capital

Solution:

Capital

• Aditi - Rs. 4,00,000
• Chanda - Rs. 2,50,000

Drawings - 5000 per month each

Profit of the year - Rs. 1,50,000

Interest on capital -10% per annum

Profit-sharing ratio - 2:1

Correction for previous profit sharing without charging the interest on the capital.

Aditi

$= \frac{2}{3} \times 150000$

$= 100000$

Chanda

$= \frac{1}{3} \times 150000$

$= 50000$

Interest on capital

Aditi

$= 10\% \times 400000$

$= \frac{10}{100} \times 400000$

$40000$

Chanda

$= 10\% \times 250000$

$= \frac{10}{100} \times 250000$

$= 25000$

New net profit

$Net \: Profit = 150000 - (40000 + 25000)$

$Net \: Profit = 150000 - 65000$

$Net \: Profit = 85000$

Interest on capital for

• Aditi - Rs. 40000
• Chanda - Rs 25000.