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On 1.4.2013 Mohan and Sohan Entered into a Partnership for Doing a Business of Dry Fruits. Mohan Introduced Rs 1,00,000 as Capital and Sohan Introduced Rs 50,000. since Sohan Could Introduce Only Rs 50,000 It Was Further Agreed that as and When There Will Be a Need Sohan Will Introduce Further Capital. Sohan Was Also Allowed to Withdraw from His Capital When the Need for the Capital Was Less. During the Year Ended 31.3.2014, Sohan Introduced and Withdrew the Following Amounts of Capital: - Accountancy

On 1.4.2013 Mohan and Sohan entered into a partnership for doing a business of dry fruits. Mohan introduced Rs 1,00,000 as capital and Sohan introduced Rs 50,000. Since Sohan could introduce only Rs 50,000 it was further agreed that as and when there will be a need Sohan will introduce further capital. Sohan was also allowed to withdraw from his capital when the need for the capital was less. During the year ended 31.3.2014, Sohan introduced and withdrew the following amounts of capital:

Date Capital Introduced Capital Withdrawn
01.5.2013 10,000 -
30.6.2013 - 5,000
30.9.2013 97,000 -
01.2.2014 - 87,000

The Partnership deed provided for interest on capital @ 6% per annum. Calculate interest on capitals of the partners

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Solution

Interest on Mohan’s Capital = 6,000
Interest on Sohan’s Capital = 5,365

Working notes:
WN 1: Calculation of Interest on Mohan’s Capital

`100000 xx 6/100 = 6000`

During 2013 Capital Balances Months remained in
the business
Product = Column 2 x Column 3
From Apr.01
to Apr 30
50,000 1 `50000xx 6/100 xx 1/12 = 250`
From May 01
to June 30
60000 2 `60000 xx 6/100 xx 2/12 = 600`
From July 01
to Sept 30
55,000 3 `55000 xx 6/100 xx 3/12 = 825`
From Oct.01
to Jan 31
1,52,000 4 `152000 xx 6/100 xx 4/12 = 3040`
From Feb 01
to Mar 31
65000 5 `65000 xx 6/100 xx 2/12 = 650`
Total Interest on Capital Rs 5,365
Concept: Admission of a Partner - Adjustment of Capitals
  Is there an error in this question or solution?
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