Question

From the following balance sheets of Subha and Sudha who share profits and losses in 2 : 3, calculate interest on capital at 5% p.a. for the year ending 31^st December, 2018.

Balance sheet as on 31^st December, 2018

Liabilities	₹	₹	Assets	₹
Capital accounts:			Fixed assets	70,000
Subha	40,000		Current assets	50,000
Sudha	60,000	1,00,000
Current liabilities		20,000
		1,20,000		1,20,000

Drawings of Subha and Sudha during the year were ₹ 8,000 and ₹ 10,000 respectively. Profit earned during the year was ₹ 30,000.

Answer 1

Particulars	Subha	Sudha
Capital	40,000	60,000
(+) Drawings	8,000	10,000
	48,000	70,000
(−) Profit	12,000	18,000
	36,000	52,000

Subha:

`36,000 xx 5/100` = 1,800

Sudha:

`52,000 xx 5/100` = 2,600

Interest on Capital:

• Subha's Capital = 1,800
• Sudha's Capital = 2,600