On March 31, 2017, After the Close of Books of Accounts, the Capital Accounts of Ram, Shyam and Mohan Showed Balance of Rs 24,000 Rs 18,000 and Rs 12,000, Respectively. - Accountancy

Sum

On March 31, 2017, after the close of books of accounts, the capital accounts of Ram, Shyam and Mohan showed balance of Rs 24,000 Rs 18,000 and Rs 12,000, respectively. It was later discovered that interest on capital @ 5% had been omitted. The profit for the year ended March 31, 2017, amounted to Rs 36,000 and the partner’s drawings had been Ram, Rs 3,600; Shyam, Rs 4,500 and Mohan, Rs 2,700. The profit sharing ratio of Ram, Shyam and Mohan was 3:2:1. Calculate interest on capital.

Solution

 Ram Shyam Mohan Capital on March 31 24,000 18,000 12,000 Add: Drawings 3,600 4,500 2,700 Less: Profit (3:2:1) (18,000) (12,000) (6,000) Capital April 01, 2012 9,600 10,500 8,700

Here, Interest on Capital = "Opening Capital" × "Rate"/100

Ram’s = 9600 xx 5/100 = "Rs"   480

Shyam’s = 10500 xx 5/100 = "Rs"  525

Mohan's = 8700 xx 5/100 = "Rs"  435

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NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
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