On March 31, 2017 After the Close of Accounts, the Capitals of Mountain, Hill and Rock :- Accountancy

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On March 31, 2017 after the close of accounts, the capitals of Mountain, Hill and Rock stood in the books of the firm at Rs 4,00,000, Rs 3,00,000 and Rs 2,00,000, respectively. Subsequently, it was discovered that the interest on capital @ 10% p.a. had been omitted. The profit for the year amounted to Rs 1,50,000 and the partner’s drawings had been Mountain: Rs 20,000, Hill Rs 15,000 and Rock Rs 10,000. Calculate interest on capital.




MountainHillRock
Closing capital4,00,0003,00,0002,00,000
Add: Drawings20,00015,00010,000
Less: Profit(50,000)(50,000)(50,000)
Opening capital3,70,0002,65,0001,60,000
Interest on Capital:
Mountain= 3,70,000 X `10/100`

= Rs. 37,000

Hill= 2,65,000 X `10/100`

= Rs. 26,500

Rock= 1,60,000 X `10/100`

= Rs. 16,000
Location: India

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