From the following information, calculate interest on Capital of C, a partner for the year ended 31st March, 2022.
C's Capital on 31/3/2022: Rs. 12,00,000
Profit credited to C for the year ended 31/3/2022: Rs. 3,00,000
Drawings made during the year: Rs. 1,00,000
Additional Capital introduced on 1/10/21: Rs. 5,00,000
Rate of Interest = 12 % p.a.
From the following information, calculate interest on Capital of C, a partner for the year ended 31st March, 2022.
C's Capital on 31/3/2022: Rs. 12,00,000
Profit credited to C for the year ended 31/3/2022: Rs. 3,00,000
Drawings made during the year: Rs. 1,00,000
Additional Capital introduced on 1/10/21: Rs. 5,00,000
Rate of Interest = 12 % p.a.
Solution
Opening Capital = Closing Capital - Profit + Drawings - Additional Capital = 12,00,000 - 3,00,000 + 1,00,000 - 5,00,000 = 5,00,000. Interest on opening capital for full year = 5,00,000 x 12% = 60,000. Interest on additional capital (6 months) = 5,00,000 x 12% x 6/12 = 30,000. Total = Rs. 90,000.
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