Question

Sushil, Bharat and Azad were partners sharing profits in 2 : 2 : 1. Their capitals on 31st March, 2026 were ₹ 2,78,000, ₹ 2,10,500 and ₹ 1,44,000 respectively after adjusting drawings and share of profit. Profit for the year 2025-26 earned by the firm was ₹ 45,000. The drawings of Sushil, Bharat and Azad during the year amounted to ₹ 30,000 ₹ 25,000 and ₹ 10,000 respectively. After the final accounts had been prepared, it was noticed that interest on capital @ 10% p.a. has not been allowed though it is mentioned in the agreement.

How much interest on capital will be received by each partner?

Answer 1

Step 1: Find Opening Capitals

Since the closing capitals are after adjusting drawings and share of profit, but before interest on capital, we use:

Opening Capital = Closing Capital + Drawings − Share of Profit

Profit = ₹ 45,000

Profit-sharing ratio = 2 : 2 : 1

• Sushil's share = ₹ 18,000
• Bharat's share = ₹ 18,000
• Azad's share = ₹ 9,000

Partner	Closing Capital	+ Drawings	− Share of Profit	Opening Capital
Sushil	₹ 2,78,000	₹ 30,000	₹ 18,000	₹ 2,90,000
Bharat	₹ 2,10,500	₹ 25,000	₹ 18,000	₹ 2,17,500
Azad	₹ 1,44,000	₹ 10,000	₹ 9,000	₹ 1,45,000

Step 2: Calculate Interest on Capital @ 10%

• Sushil = ₹ 2,90,000 × 10% = ₹29,000
• Bharat = ₹ 2,17,500 × 10% = ₹ 21,750
• Azad = ₹ 1,45,000 × 10% = ₹ 14,500