Question

Gomez and Arun Gomez are partners sharing profits and losses in the ratio of 2:1. They are allowed interest at 10% per annum on capitals and loans to the partnership.

	A. Gomez	Arun Gomez
Capital	20,000	8,000
Loan to firm	3,000	......

The partnership has made a net profit of Rs. 40,000 for the year. How much is the total increase in the net worth of A.Gomez? 

(a) 24,800 

(b) 25,000 

(c) 26,800 

(d) 27,100

Answer 1

(c) 26,800 

Notes: 

Capital A/c of A.Gomez:

P/L Appropriation A/c:

A Gomez’s opening capital (capital in the begining of the year) is Rs. 20,000 and closing capital (capital at the end of the year) is Rs. 46,800. So total increase in the net worth of A.Gomez is Rs. 26,800. (46,800-20,000).