Partnership

Accounting

Medium

common

Ram and Laxman started business on 1st Jan 2020 with a capital of Rs 1,20,000 and Rs 80,000 respectively. Ram introduced Rs. 50,000 to the firm on 1st July 2020 as additional capital. If the rate of interest is 15% p.a. Assuming that accounts are closed as per calender year then the Interest payable to Ram on Capital would be:

Rs. 12,700

Rs. 18,000

Rs. 25,500

Rs. 21,750

✅ Correct Option: 4

Ram's capital consists of two components with different time periods:

Initial Capital: Rs. 1,20,000 from 1st Jan 2020 to 31st Dec 2020 = 12 months

Additional Capital: Rs. 50,000 from 1st July 2020 to 31st Dec 2020 = 6 months

Interest is calculated separately for each period using the formula:

Interest = Capital × Rate × $\frac{Time}{12}$

Interest on Initial Capital:

= 1,20,000 × $\frac{15}{100}$ × $\frac{12}{12}$

= 1,20,000 × 0.15

= Rs. 18,000

Interest on Additional Capital:

= 50,000 × $\frac{15}{100}$ × $\frac{6}{12}$

= 50,000 × 0.15 × 0.5

= Rs. 3,750

Total Interest on Capital for Ram:

= 18,000 + 3,750

= Rs. 21,750

The additional capital introduced on 1st July gets interest only for 6 months (July to December), not for the full year, which is why it's calculated separately with the proportionate time period.

2025: 16 May Shift 1

There is a need for valuation of goodwill under which of the following cases

(A) Admission of new partner

(B) Retirement of a partner

(D) Amalgamation of partnership firms.

Choose the correct answer from the options given below:

2023: 28 May Shift 1

The steps in the Process of Preparing Profit and Loss Appropriation account are :

(A) Transfer the net profit to the credit side of P & L Appropriation A/c

(B) Divide the Profit among partners in the Profit Sharing ratio

(D) Debit the P & L Appropriation A/c with all appropriations like partners salary etc.

(E) Credit the P & L Appropriation A/c with interest on drawing and deficiency on account of partner's guarantee of earnings to the firm.

Choose the correct answer from the options given below :

2025: 26 May Shift 2

Under the fixed capital method, the capital of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn as per the agreement between the partners. Which among the following is NOT the feature of the fixed capital method?

2022: 20 Aug Shift 2

Match List I with List II

List I	List II
A. Partner's Salary	I. P & L A/c Dr.
B. Manager's Salary	II. P & L Appropriation A/c Dr.
C. Distribution of Loss	III. P & L A/c Cr.
D. Commission Received	IV. P & L Appropriation A/c Cr.

Choose the correct answer from the options given below:

2023: 28 May Shift 1

Partnership deed should be drafted and prepared as per :

2025: 31 May Shift 1

Which statement is not true about Capital Accounts of Partner-

Solution

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