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. 12,750

Rs. 18,000

Rs. 25,500

Rs. 21,750

✅ Correct Option: 4

Ram's capital has two components with different time periods:

Initial Capital: Rs. 1,20,000 (from 1st Jan 2020 to 31st Dec 2020)

Time period = 12 months

Interest = $\text{Principal} \times \text{Rate} \times \frac{\text{Time}}{12}$

Interest on initial capital = $1,20,000 \times \frac{15}{100} \times \frac{12}{12}$ = Rs. 18,000

Additional Capital: Rs. 50,000 (from 1st July 2020 to 31st Dec 2020)

Time period = 6 months (July to December)

Interest on additional capital = $50,000 \times \frac{15}{100} \times \frac{6}{12}$ = Rs. 3,750

Total Interest on Ram's Capital = 18,000 + 3,750 = Rs. 21,750

The additional capital introduced mid-year earns interest only for the remaining 6 months of the accounting period, which is why it's calculated separately from the initial capital that remained invested for the full year.

2026: 20 May Shift 1

Radha and Rani are partners in a firm. Their capital accounts as on April 01, 2024 showed a balance of Rs. 2,00,000 and Rs. 3,00,000 respectively. On July 01, 2024, Radha introduced additional capital of Rs. 50,000. On October 01, Radha withdrew Rs. 30,000, from her capital. Interest is allowed @ 8% p.a. Calculate the interest payable to Radha on her capital during the financial year 2024–2025.

2026: 23 May Shift 2

Choose the correct option for transferring partner's salary to Profit and Loss Appropriation A/c

2025: 2 June Shift 2

When the date of drawing is not specified, interest on drawings are calculated for

2025: 30 May Shift 2

Which among the following is not the feature of a fixed capital method by which the capital accounts of partners can be maintained?

2026: 23 May Shift 2

Arun, a partner in a firm, withdraws Rs.1,000 from his capital at the beginning of every month for personal use. What would be the amount of interest on drawings for the whole year given the rate of interest is 9% per annum?

2026: 24 May Shift 1

Mukesh and Vanshika are partners. They agreed to share profits in the ratio of 3:2.

Their capital balances on 01st April, 2024 were Rs.15,00,000 and Rs. 10,00,000 respectively. Additional capital contributed by Mukesh and Vanshika was Rs 3,00,000 and Rs 2,00,000 respectively on 01st Jan, 2025. Interest on capital was allowed @ 5 % p.a. Find the interest on Vanshika's Capital.

Solution

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