Question

Ajay and Vijay are partners in a firm. Their capital accounts as on April 1, 2015 showed a balance of Rs $2,00,000$ and Rs $3,00,000$ respectively. On 1st july,2015, Ajay introduced additional capital of Rs $50,000$ and Vijay, Rs. $60,000$. On 1st Oct, Ajay withdrew Rs $30,000$, and on 1st Jan, 2016 Vijay withdraw, Rs $15,000$ from their capitals. Interest is allowed @ $8$ p.a.
Calculate interest payable on capital to both the partners during the financial year 2015-2016.

• A. Rs. $17,800$ for Ajay and Rs. $27,300$ for Vijay
• B. Rs. $18,700$ for Ajay and Rs. $23,700$ for Vijay
• C. Rs. $18,700$ for Vjay and Rs. $27,000$ for Ajay
• D. Rs. $19,800$ for Vijay and Rs. $29,300$ for Ajay

Answer 1

The correct option is A Rs. $17,800$ for Ajay and Rs. $27,300$ for Vijay

Particulars	Ajay	Vijay
Opening Balance of Capital A/c	2,00,000	3,00,000
Interest on Capitals @8% upto 31.06.2015	4,000	6,000
Add: Capital Introduced	50,000	60,000
Adjusted balance of capital A/c	2,50,000	3,60,000
Interest on Capitals @8% from 01.07.2015 to 30.09.2015	5,000	-
Interest on Capitals @8% from 01.07.2015 to 31.12.2015	-	14,400
Less: Capital Withdrawn	30,000	15,000
Adjusted balance of capital A/c	2,20,000	3,45,000
Interest on Capitals @8% from 01.10.2015 to 30.03.2016	8,800	-
Interest on Capitals @8% from 01.01.2016 to 30.03.2016	-	6,900
Total Interest on Capitals	17,800	27,300

Interest on capital is usually calculated at the end of the year.