Question

X and Y are partners in the ratio of 2 : 1. Their capitals are ₹ 3,00,000 and ₹ 2,00,000, respectively. Interest on capitals is allowed @ 9% p.a. The firm earned a profit of ₹ 30,000 for the year ended 31st March 2024. Interest on Capital will be ______.

Options

• X ₹ 27,000; Y ₹ 18,000

• X ₹ 20,000; Y ₹ 10,000

• X ₹ 18,000; Y ₹ 12,000

• No interest will be allowed.

Answer 1

X and Y are partners in the ratio of 2 : 1. Their capitals are ₹ 3,00,000 and ₹ 2,00,000, respectively. Interest on capitals is allowed @ 9% p.a. The firm earned a profit of ₹ 30,000 for the year ended 31st March 2024. Interest on Capital will be X ₹ 18,000; Y ₹ 12,000.

Explanation:

Calculate Interest on Capitals:

Interest on X’s Capital = `3,00,000 xx 9/100`

= 27,000

Interest on Y’s Capital = `2,00,000 xx 9/100`

= 18,000

Total Interest on Capitals = 27,000 + 18,000

= 45,000

The available profit is ₹ 30,000, whereas interest due on Capitals is ₹ 45,000. Since the profit is less than interest, ₹ 30,000 will be divided in 27,000 : 18,000 or 3 : 2.

Interest on Capital will be:

X = `30,000 xx 3/5`

= ₹ 18,000

Y = `30,000 xx 2/5`

= ₹ 12,000