Interest on capital is payable on the opening capital (i.e. capital on 1.1.05)
Opening capital = Closing capital + drawings – Net Profit
Closing capital = Rs. 6000
Drawings = 3000
Net Profit during the year = 4000
P&L appropriation shown in B/S = 2000
∴ Net profit credited to partners capital = 4000 – 2000 = 2000
Net profit credited to Jaya = 2000 × 1/2 (ratio being 1:1) = 1000
Opening capital = 6000 + 3000 – 1000 = 8000
Interest on capital = 8000 × 5/100 = 400.