Question

Show how the following will be recorded in the Capital Accounts of the Partners Sohan and Mohan when their capitals are fluctuating:

Answer 1

Working Notes:

Calculation of Interest on Capital

Interest on Schen's Capital  $=4,00,000 \times \frac{5}{100}=20,000$

Interest on Mohan's Capital =$3,00,000 \times \frac{5}{100}=15,000$