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Question
On 31st March, 2024, the balances in the capital accounts of Aditi and Chanda after making adjustments for profits and drawings were ₹ 4,00,000 and ₹ 2,50,000, respectively. Subsequently, it was discovered that the interest on capital had been omitted.
The profit for the year ended on 31st March, 2024, was ₹ 1,50,000.
During the year, Aditi and Chanda each withdrew ₹ 5,000 per month.
Interest on capital was to be allowed @ 10% per annum.
The profit-sharing ratio of partners was 2 : 1.
Interest on capital will be:
Options
Aditi ₹ 44,000 and Chanda ₹ 24,000
Aditi ₹ 24,000 and Chanda ₹ 14,000
Aditi ₹ 40,000 and Chanda ₹ 25,000
Aditi ₹ 36,000 and Chanda ₹ 26,000
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Solution
Aditi ₹ 36,000 and Chanda ₹ 26,000
Explanation:
Total Aditi’s drawing = 5,000 × 12
= 60,000
Total Chanda’s drawing = 5,000 × 12
= 60,000
| Particulars | Aditi (₹) | Chanda (₹) |
| Closing capital | 4,00,000 | 2,50,000 |
| Less: Profit already credited (₹ 1,50,000 in 2 : 1) | 1,00,000 | 50,000 |
| 3,00,000 | 2,00,000 | |
| Add: Drawings already debited | 60,000 | 60,000 |
| Opening capital | 3,60,000 | 2,60,000 |
| Interest on capital @ 10% p.a. | 36,000 | 26,000 |
