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P And Q are partners in a business sharing profits or losses in the ratio 3:2. Their capitals as at 31st march ,2019 were 1,32,000 and 99,000 respectively. During the year 2018-19 ,P's' interest on capital during the year ( duty credited to partner's capitals) were 88.000 . calculate interest on capital @12% p.a. for the year ending 31st march 2019?
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P And Q are partners in a business sharing profits or losses in the ra...
Calculation of Interest on Capital

Given data:

- P's capital as at 31st March 2019 = Rs. 1,32,000
- Q's capital as at 31st March 2019 = Rs. 99,000
- Profit sharing ratio = 3:2
- P's interest on capital during the year 2018-19 = Rs. 88,000

Step 1: Calculate the total capital of the firm as at 31st March 2019

Total capital = P's capital + Q's capital
Total capital = Rs. 1,32,000 + Rs. 99,000
Total capital = Rs. 2,31,000

Step 2: Calculate the average capital of the firm

Average capital = (Opening capital + Closing capital) / 2
Average capital = (Rs. 2,31,000 + Rs. 2,31,000) / 2
Average capital = Rs. 2,31,000

Step 3: Calculate the interest on capital @12% p.a.

Interest on capital = Average capital x Rate of interest
Interest on capital = Rs. 2,31,000 x 12/100
Interest on capital = Rs. 27,720

Step 4: Calculate P's share of interest on capital

P's share of interest on capital = P's capital / Total capital x Interest on capital
P's share of interest on capital = Rs. 1,32,000 / Rs. 2,31,000 x Rs. 27,720
P's share of interest on capital = Rs. 15,960

Step 5: Compare P's share of interest on capital with the interest already credited to his capital account

P's interest already credited = Rs. 88,000
P's share of interest on capital = Rs. 15,960

Since P's interest already credited is higher than his share of interest on capital, there is no need to credit any further interest to his capital account.

Conclusion:

- Interest on capital @12% p.a. for the year ending 31st March 2019 is Rs. 27,720.
- P's interest on capital already credited to his capital account is Rs. 88,000 which is higher than his share of interest on capital calculated as Rs. 15,960. Therefore, no further interest needs to be credited to his capital account.
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P And Q are partners in a business sharing profits or losses in the ratio 3:2. Their capitals as at 31st march ,2019 were 1,32,000 and 99,000 respectively. During the year 2018-19 ,P's' interest on capital during the year ( duty credited to partner's capitals) were 88.000 . calculate interest on capital @12% p.a. for the year ending 31st march 2019?
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P And Q are partners in a business sharing profits or losses in the ratio 3:2. Their capitals as at 31st march ,2019 were 1,32,000 and 99,000 respectively. During the year 2018-19 ,P's' interest on capital during the year ( duty credited to partner's capitals) were 88.000 . calculate interest on capital @12% p.a. for the year ending 31st march 2019? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about P And Q are partners in a business sharing profits or losses in the ratio 3:2. Their capitals as at 31st march ,2019 were 1,32,000 and 99,000 respectively. During the year 2018-19 ,P's' interest on capital during the year ( duty credited to partner's capitals) were 88.000 . calculate interest on capital @12% p.a. for the year ending 31st march 2019? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for P And Q are partners in a business sharing profits or losses in the ratio 3:2. Their capitals as at 31st march ,2019 were 1,32,000 and 99,000 respectively. During the year 2018-19 ,P's' interest on capital during the year ( duty credited to partner's capitals) were 88.000 . calculate interest on capital @12% p.a. for the year ending 31st march 2019?.
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