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On March 31, 2017, after the Close of Books of Accounts, the Capital Accounts of Ram, Shyam and Mohan Showed Balance of Rs 24,000 Rs 18,000 and Rs 12,000 - Bzziii.com

On March 31, 2017, after the close of books of accounts, the capital accounts of Ram, Shyam and Mohan showed balance of Rs 24,000 Rs 18,000 and Rs 12,000, respectively. It was later discovered that interest on capital @ 5% had been omitted. The profit for the year ended March 31, 2017, amounted to Rs 36,000 and the partner’s drawings had been Ram, Rs 3,600; Shyam, Rs 4,500 and Mohan, Rs 2,700. The profit sharing ratio of Ram, Shyam and Mohan was 3:2:1. Calculate interest on capital. SOLUTION Calculation for know the firm’s Capital Ram Shyam Mohan Balance Captal at 31st march 2017 24,000 18,000 12,000 Add : Drawings 3,600 4,500 2,700 Less : Profit (18,000) (12,000) (6,000) 9,600 10,500 8,700 Calculations for Interest on capital Opening Capital `\times` `"Rate"/"100"` Ram's = Rs. 9,600 `\times` `5/100` = Rs. 480. Shyam's = Rs. 10,500 `\times` `5/100` = Rs. 525. Mohan's = Rs. 8,700 `\times` `5/100` = Rs. 435 Chapter-2 Partnership Basic: Accounts