Business Studies, asked by sonusharma138, 8 months ago

X and Y invested Rs. 20,000 & Rs. 10,000. Interest on capital is allowed @ 6% per annum.

Profits are shared in ratio of 2 : 3.Profits for year ending 11.3.2015 is Rs. 1,500.

Show allocation of profits when partnership deed.

a. Allows interest on capital & deed is silent on treating interest as charge.

b. Interest is charge against profit.​

Answers

Answered by Anonymous
13

Answer:

Calculation of interest on capital.

Interest on X capital

20,000×

100

6

=Rs1200

Interest on Y's capital

10,000×

100

6

=Rs600

Total interest (1200+600)=Rs1800

Total profits available = Rs.1500

As total interest on capital is more than total profits, so profits of Rs 1500 to be distributed between X & Y as per their interest on capital ratio.

X:Y

Interest on capital = 1200:600 or 2:1

∴ X share = 1500×

3

2

=Rs1000

Y share = 1500×

3

1

=Rs500

Part (ii)

When interest on capital is charge, complete interest on capital will be charged.

Total interest = Rs. 1800

Total Profit = Rs. 1500

There is loss of Rs. 300. This loss of Rs. 300 will be distributed between X and Y in 2:3 ratio.

X share of loss = 300*2/5 = Rs. 120

Y share of loss = 300*3/5 = Rs. 180.

Answered by rajagrewal768
0

Answer:

a)

Interest to X= 1000

Interest allowed by Y = 500

Explanation:

Interest on capital means the interest which we get on our capital .

a) Interest on X' capital = 20,000×6/100= 1200

Y's capital = 10,000× 6/100 = 600

Total interest = 1200 + 600 = 1800

Ratio on interest will be = 1200 : 600

= 2:1

Interest allowed to partner= profit × Interest to be given to partner / total interest

= Interest to X= 1500 × 1200/1800 = 1000

Interest allowed by y = 1500 × 600/1800 = 500

b)

(a)

The case of sufficient profit

profit and loss A/C Dr.

To Interest on capital A/C

( Interest on capital transferred to profit and loss A/C)

(b)

In case of sufficient profit and loss-

Profit and loss adjustment A/C

to Interest on capital A/C

( being interest on capital transferred to p&l adjustment A/C)

It is important that records should be properly maintained in all the department.

FINAL ANSWER -

a)

Interest to X= 1000

Interest allowed by Y = 500

#SPJ2

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