0 votes
441 views
in Accounting for Partnership – Basic Concepts by (27.2k points)
closed by

From the following Balance Sheet of Aneesh and Jaya, calculate interest on capital @ 5% per annum, payable to Jaya for the year ending 31.12.05. 

Balance Sheet as on 31.12.2005:

During the year, Jaya’s drawings were Rs. 3,000 and the firm made a profit of Rs. 4,000.

1 Answer

+1 vote
by (28.6k points)
selected by
 
Best answer

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.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

...