On 1st April, 2020, Pixie, Nixie and Gypsy entered into a partnership with fixed capitals of ₹ 60,000, ₹ 50,000 and ₹ 30,000 respectively. On 1st October, 2020, Pixie gave a loan of ₹ 12,000 to the firm.
On 1st April 2020, Pixie, Nixie, and Gypsy entered into a partnership with fixed capitals of ₹ 60,000, ₹ 50,000, and ₹ 30,000 respectively. On 1st October 2020, Pixie gave a loan of ₹ 12,000 to the firm.
The partnership deed contained the following clauses:
a) Interest on drawings to be charged @ 4% per annum
b) Pixie to be entitled to a rent of ₹ 2,000 per annum for allowing the firm to carry on the business on his premises.
Nixie withdrew ₹ 1,000 at the end of the month for the first six months.
The net profit of the firm for the year ending 31st March 2021 (before any interest but after rent on Pixie’s premises) was ₹ 1,21,000.
a) The Net Profit of the firm will be
i) ₹ 1,21,000
ii) ₹ 1,20,640
iii) ₹ 1,18,640
iv) ₹ 96,640
b) Interest on Drawings charged from Nixie will be
i) ₹ 340
ii) ₹ 220
iii) ₹ 170
iv) ₹ 18.33
a) Ans = ii)
Explanation:-
Net Profit = (Profit – Rent on Pixie’s Premises) – Interest on Pixie’s Loan
Net Profit = 1,21,000 – 12000 * 6% * 6/12
Net Profit = 1,21,000 – 360
Net Profit = ₹ 1,20,640
b) Ans – iii)
Explanation:-
Average Month = 11 + 6/2 = 8.5 Months
Interest on Nixie’s Drawings = 1000 * 6 * 4% * 8.5/12
Interest on Nixie’s Drawings = ₹ 170
