Question

Q27. The capital account of Ram and Shyam showed a balance of rupees 80000 and rupees 40,000 as on
1st April 2019. they shared profits and losses in the ratio 3:2. They allow interest on capital at the rate of
10% per annum and Interest on drawing at the rate of 12% per annum. During the year, Ram withdrew
rupees 2000 per month at the beginning of every month and Shyam withdrew rupees 1000 per month at
the end of every month. profit for the year, before The above-mentioned Adjustment was rupees 41500.
calculate interest on drawing and show the distribution of profit.​

Answer 1

Answer:

Calculation of Capital balance in the beginning:

Particulars Ram Mohan

Capitals at the end of the year 24000 18000

Less: Profit already credited (8000) (8000)

Add: Drawings already debited 4000 6000

Capital at the beginning of the year 20000 16000

Note: Interest on capital is always calculated on the opening balance of the partner's capital.

Ram's interest on capital= 20000 * 5/100

= 1000

Mohan's interest on capital= 16000 * 5/100

= 800