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Question
A and B are partners in a firm sharing profit in the ratio of 3 : 2. Their Balance Sheet was on 31st March, 2021, was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| A’s Capital | 30,000 | Drawings: | 6,000 | |
| B’s Capital | 10,000 | A | 4,000 | |
| B | 2,000 | |||
| Other Assets | 34,000 | |||
| 40,000 | 40,000 |
Net profit of the year ended 31-3-2021, ₹ 5,000, was divided without providing for interest on capital @ 10% p.a. What will be the amount of interest on A’s Capital?
Options
₹ 3,000
Nil
₹ 3,100
₹ 2,700
MCQ
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Solution
₹ 2,700
Explanation:
| Particulars | A (₹) | B (₹) |
| Closing Capital | 30,000 | 10,000 |
| Less: Net Profit (3 : 2) | 3,000 | 2,000 |
| Opening Capital | 27,000 | 8,000 |
| Interest on capital @ 10% p.a. | 2,700 | 800 |
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