Vidit and Seema were partners in a firm sharing profits and losses in the ratio of 3:2. Their capitals were ₹ 1,20,000 and ₹ 2,40,000 respectively. They were entitled to interest on capital @ 10%. The firm earned profit of ₹ 18,000 during the year. The interest on Vidit’s capital will be
Vidit and Seema were partners in a firm sharing profits and losses in the ratio of 3:2. Their capitals were ₹ 1,20,000 and ₹ 2,40,000 respectively. They were entitled to interest on capital @ 10%. The firm earned profit of ₹ 18,000 during the year. The interest on Vidit’s capital will be
a) ₹ 12,000
b) ₹ 10,800
c) ₹ 7,200
d) ₹ 6,000
Anurag Pathak Changed status to publish April 9, 2023
Ans – d)
Explanation:-
Vidit’s Interest on capital = 1,20,000 * 10% = ₹ 12,000
Seema’s Interest on capital = 2,40,000 * 10% = ₹ 24,000
Total interest of both the partners = 12,000 + 24,000 = ₹ 36,000
As total interest (appropriation) is more than the available profit. In the absence of any further agreement, interest on the partner’s capital would be allowed only upto the available profit in their interest on capital ratio i.e., 12000 : 24000 i.e., 1:2
Thus
Vidit’s Interest on Capital is = 18,000 * 1/3 = ₹ 6,000.
Anurag Pathak Changed status to publish April 4, 2023
