On March 31, 2017, after the Close of Books of Accounts, the Capital Accounts of Ram, Shyam and Mohan Showed Balance of Rs 24,000 Rs 18,000 and Rs 12,000 - Bzziii.com

On March 31, 2017, after the close of books of accounts, the capital accounts of Ram, Shyam and Mohan showed balance of Rs 24,000 Rs 18,000 and Rs 12,000, respectively. It was later discovered that interest on capital @ 5% had been omitted. The profit for the year ended March 31, 2017, amounted to Rs 36,000 and the partner’s drawings had been Ram, Rs 3,600; Shyam, Rs 4,500 and Mohan, Rs 2,700. The profit sharing ratio of Ram, Shyam and Mohan was 3:2:1. Calculate interest on capital.

Calculation for know the firm’s Capital

	Ram	Shyam	Mohan
Balance Captal at 31st march 2017	24,000	18,000	12,000
Add : Drawings	3,600	4,500	2,700
Less : Profit	(18,000)	(12,000)	(6,000)
	9,600	10,500	8,700

Calculations for Interest on capital

Opening Capital `\times` `"Rate"/"100"`

Ram's = Rs. 9,600 `\times` `5/100`

= Rs. 480.

Shyam's = Rs. 10,500 `\times` `5/100`

= Rs. 525.
Mohan's = Rs. 8,700 `\times` `5/100`

= Rs. 435

Chapter-2 Partnership Basic: Accounts

24 25 26 27 28