Question

P and Q are partners sharing profits and losses in the ratio of 3:2. On 1st April 2009 their capital balances were Rs.50, 000 and 40,000 respectively. On 1st July 2009 P brought Rs.10, 000 as his additional capital whereas Q brought Rs.20, 000 as additional capital on 1st October 2009. Interest on capital was provided @ 5% p.a. Calculate the interest on capital of P and Q on 31st March 2010. 

Answer 1

Interest on Capital for A

DATE	AMOUNT	NO. OF MONTHS	PRODUCT
1-4-2009 TO 31-3-10	50,000	12	6,00,000
1-7-2009 TO 31-3-10	10,000	09	90,000
		TOTAL	6,90,000

Interest on capital for A will be = 6, 90,000 x 5/100 x 1/12  =   2,875

DATE	AMOUNT	NO OF MONTHS	PRODUCT
1-4-2009 to 31-3-10	40,000	12	4,80,000
1-10-2009 to 31-3-10	20,000	06	1,20,000
		TOTAL	6,00,000

Interest on capital for B will be = 6, 00,000 x 5/100 x 1/12 = 2,500