Question

From the following balance sheets of Rajan and Devan who share profits and losses 2:1, calculate interest on capital at 6% p.a. for the year ending 31^st December, 2018. 

Balance sheet as on 31^st December 2018

On 1^st April, 2018, Rajan introduced an additional capital of Rs. 40,000 and on 1^st September, 2018, Devan introduced Rs. 30,000. Drawings of Rajan and Devan during the year were Rs. 20,000 and Rs. 10,000 respectively. Profit earned during the year was Rs. 70,000.

Answer 1

Interest on capital and Profit and loss.