# On March 31, 2017 After the Close of Accounts, the Capitals of Mountain, Hill and Rock Stood in the Books of the Firm at Rs 4,00,000, Rs 3,00,000 and Rs 2,00,000, Respectively - Accountancy

Sum

On March 31, 2017 after the close of accounts, the capitals of Mountain, Hill and Rock stood in the books of the firm at Rs 4,00,000, Rs 3,00,000 and Rs 2,00,000, respectively. Subsequently, it was discovered that the interest on capital @ 10% p.a. had been omitted. The profit for the year amounted to Rs 1,50,000 and the partner’s drawings had been Mountain: Rs 20,000, Hill Rs 15,000 and Rock Rs 10,000. Calculate interest on capital.

#### Solution

Generally interest on Capital is calculated on opening balance of capital. If additional capital is not given.

 Mountain Hill Rock Closing Capital 4,00,000 3,00,000 2,00,000 Add: Drawings 20,000 15,000 10,000 Less: Profit (1:1:1) (50,000) (50,000) (50,000) Opening Capital 3,70,000 2,65,000 1,60,000

Interest on Capital

Mountain 370000 xx 10/100 = "Rs"   37000

Hill 265000 xx 10/100 = "Rs"   26500

Rock 160000 xx 10/100 = "Rs"  16000

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#### APPEARS IN

NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
Chapter 2 Accounting for Partnership : Basic Concepts
Numerical Questions | Q 15 | Page 102