Question

Nidhi and Kunal were partners in a firm sharing profits and losses in the ratio of 4 : 1. Their capitals were ₹ 3,00,000 and ₹ 2,00,000, respectively. They were entitled to interest on capital @ 6% p.a. The firm earned a profit of ₹ 15,000 during the year. Interest on partners’ capitals will be ______.

Options

• Nidhi ₹ 18,000; Kunal ₹ 12,000

• Nidhi ₹ 7,500; Kunal ₹ 7,500

• Nidhi ₹ 9,000; Kunal ₹ 6,000

• Nidhi ₹ 12,000; Kunal ₹ 3,000

Answer 1

Nidhi and Kunal were partners in a firm sharing profits and losses in the ratio of 4 : 1. Their capitals were ₹ 3,00,000 and ₹ 2,00,000, respectively. They were entitled to interest on capital @ 6% p.a. The firm earned a profit of ₹ 15,000 during the year. Interest on partners’ capitals will be Nidhi ₹ 9,000; Kunal ₹ 6,000.

Explanation:

1. Calculate Interest Actually Due:

Nidhi = `3,00,000 xx 6/100`

=18,000

Kunal = `2,00,000 xx 6/100`

= 12,000

Total Interest Due = 18,000 + 12,000

= 30,000

2. The firm only earned ₹ 15,000, which is not enough to pay the full ₹ 30,000.

3. Distribute Profit in the Interest Ratio:

Ratio of Interest Due = 18,000 : 12,000 which simplifies to 3 : 2.

Nidhi’s Interest = `15,000 xx 3/5`

= 9,000

Kunal’s Interest = `15,000 xx 2/5`

= 6,000