Girish and satish are partner in a firm.their capitals on april 1, 2016 were rs. 560000 and 475000respectively . On august 1, 2016 they decided that their capitals should be rs.500000 each. The necessary adjustment in the capitals were made by introducing or withdrawing cash . Interst on capital is allowed at 6% p.a. you are required on compute interst on capital for the year ending march 31,2017

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Dear Student

Calculation of Interest on Capital Girish Satish

Opening Capital on 01-04-16 till 31-07-16 560,000 475,000

Interest on Capital till 31-07-16 11,200 9,500

(5,60,000 x 6% x 4/12) (4,75,000 x 6% x 4/12)

Capital From 01-08-16 to 31-03-17 500,000 500,000

Interest on Capital from 01-08-16 to 31-03-17 20,000 20,000

(5,00,000 x 6% x 8/12) (5,00,000 x 6% x 8/12)

Total Interest on Capital 31,200 29,500

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P

and

Q

were partners in a firm sharing profits equally. Their fixed capitals were

R s .1, 00, 000

and

R s .50, 000

respectively. The Partnership Deed provided for Interest on Capital at the rate of

10 %

per annum. For the year ended 31st March, 2016, the profits of the firm were distributed without providing Interest on Capital.
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Calculation of Interest on Capital	Girish	Satish
Opening Capital on 01-04-16 till 31-07-16	560,000	475,000

Interest on Capital till 31-07-16	11,200	9,500
	(5,60,000 x 6% x 4/12)	(4,75,000 x 6% x 4/12)

Capital From 01-08-16 to 31-03-17	500,000	500,000

Interest on Capital from 01-08-16 to 31-03-17	20,000	20,000
	(5,00,000 x 6% x 8/12)	(5,00,000 x 6% x 8/12)

Total Interest on Capital	31,200	29,500