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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.

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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`

  Is there an error in this question or solution?
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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
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