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surajmukhi and gulab started partnership business on April 12017 with capital of :250000 and 150000 respectively. on October 1,2017 they decide That their capital should be 200000 each. The necessary adjustments in the ccapital are made by introducing or withdrew cash. interest o n capital is to be allowed @10p. a calculate interest on capital as on March 31 2018
Most Upvoted Answer
surajmukhi and gulab started partnership business on April 12017 with ...
Surajmukhi= 2,50,000×10/100×6/12=12, 500
= 2,00,000×10/100×6/12=10, 000
interest on capital= 22,500
gulab =1, 50,000×10/100×6/12=7, 500
=2, 00,000×10/100×6/12=10, 000
interest on capital=17, 500
Community Answer
surajmukhi and gulab started partnership business on April 12017 with ...
Calculation of Interest on Capital for Surajmukhi and Gulab


Initial Capital and Partnership Agreement


  • Surajmukhi's initial capital: 250000

  • Gulab's initial capital: 150000

  • Partnership started on April 1, 2017

  • Partnership agreement did not mention any specific interest on capital



Change in Capital on October 1, 2017


  • On October 1, 2017, Surajmukhi and Gulab decided to change their capital to 200000 each

  • Adjustment in capital was made by introducing or withdrawing cash



Calculation of Interest on Capital


  • The interest on capital for both partners will be calculated from April 1, 2017, to March 31, 2018

  • The interest rate on capital is 10%

  • The interest on capital will be calculated based on the average capital of the partners during the year



Calculation of Average Capital


  • Surajmukhi's capital from April 1, 2017, to September 30, 2017: 250000

  • Surajmukhi's capital from October 1, 2017, to March 31, 2018: 200000

  • Gulab's capital from April 1, 2017, to September 30, 2017: 150000

  • Gulab's capital from October 1, 2017, to March 31, 2018: 200000

  • Average capital for Surajmukhi: (250000+200000)/2 = 225000

  • Average capital for Gulab: (150000+200000)/2 = 175000



Calculation of Interest on Capital


  • Interest on capital for Surajmukhi: 225000*10% = 22500

  • Interest on capital for Gulab: 175000*10% = 17500



Conclusion


  • The interest on capital for Surajmukhi and Gulab for the year ending March 31, 2018, is 22500 and 17500 respectively.

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surajmukhi and gulab started partnership business on April 12017 with capital of :250000 and 150000 respectively. on October 1,2017 they decide That their capital should be 200000 each. The necessary adjustments in the ccapital are made by introducing or withdrew cash. interest o n capital is to be allowed @10p. a calculate interest on capital as on March 31 2018 Related: Problems Based on Fundamentals- Accounting for Partnership Firms-Fundamentals, Class 12, Accountancy
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