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Capital accounts of A and B stood at 4 lakh and 300000 respectively after necessary adjustments in respect of the drawings and the net profit for the year ended 31st March 2019 it was subsequently what is that 5% per annum interest on capital and also drawings were not taken into account in arriving at the distributable profit that drawings of the partners had been a 12000 drawn at the end of each quarter and B 18000 drawn at the end of each half year?
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Capital accounts of A and B stood at 4 lakh and 300000 respectively af...
Calculation of Interest on Capital

  • A's capital = 4,00,000

  • B's capital = 3,00,000

  • Total capital = 7,00,000

  • Interest on capital @5% p.a. = 35,000 (7,00,000 x 5%)



Adjustment for Drawings

  • A's quarterly drawings = 12,000 x 4 = 48,000

  • B's half-yearly drawings = 18,000 x 2 = 36,000

  • Total drawings = 84,000

  • Drawings not deducted from distributable profit, so subtract from net profit to arrive at distributable profit



Calculation of Distributable Profit

  • Net profit = ?

  • Total drawings = 84,000

  • Distributable profit = Net profit - Total drawings = ? - 84,000



Calculation of Share of Profits

  • A's share of profit = (A's capital / Total capital) x Distributable profit

  • B's share of profit = (B's capital / Total capital) x Distributable profit



Final Capital Accounts

  • A's capital = 4,00,000 + A's share of profit + Interest on capital - A's drawings

  • B's capital = 3,00,000 + B's share of profit + Interest on capital - B's drawings



Conclusion
After adjusting for the drawings and calculating the interest on capital, the final capital accounts of A and B can be determined. Distributable profit is calculated by subtracting the total drawings from the net profit, which was not taken into account initially. A's quarterly drawings and B's half-yearly drawings are also considered in the calculation.
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Capital accounts of A and B stood at 4 lakh and 300000 respectively af...
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Capital accounts of A and B stood at 4 lakh and 300000 respectively after necessary adjustments in respect of the drawings and the net profit for the year ended 31st March 2019 it was subsequently what is that 5% per annum interest on capital and also drawings were not taken into account in arriving at the distributable profit that drawings of the partners had been a 12000 drawn at the end of each quarter and B 18000 drawn at the end of each half year?
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Capital accounts of A and B stood at 4 lakh and 300000 respectively after necessary adjustments in respect of the drawings and the net profit for the year ended 31st March 2019 it was subsequently what is that 5% per annum interest on capital and also drawings were not taken into account in arriving at the distributable profit that drawings of the partners had been a 12000 drawn at the end of each quarter and B 18000 drawn at the end of each half year? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Capital accounts of A and B stood at 4 lakh and 300000 respectively after necessary adjustments in respect of the drawings and the net profit for the year ended 31st March 2019 it was subsequently what is that 5% per annum interest on capital and also drawings were not taken into account in arriving at the distributable profit that drawings of the partners had been a 12000 drawn at the end of each quarter and B 18000 drawn at the end of each half year? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Capital accounts of A and B stood at 4 lakh and 300000 respectively after necessary adjustments in respect of the drawings and the net profit for the year ended 31st March 2019 it was subsequently what is that 5% per annum interest on capital and also drawings were not taken into account in arriving at the distributable profit that drawings of the partners had been a 12000 drawn at the end of each quarter and B 18000 drawn at the end of each half year?.
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