Question

X and Y are partners with the capital of Rs. 50,000 and Rs. 30,000 respectively. Interest payable on capital is 10% p.a. Find the interest on capital for both the partners when the profits earned by the firm is Rs. 4,800?

• A. Rs. 5,000 and Rs. 3,000.
• B. Rs. 3,000 and Rs. 1,800.
• C. No interest will be paid to the partners.
• D. None of the above.

Answer 1

Answer: (B)

Rs. 3,000 and Rs. 1,800.

Interest on capital = capital x rate

X :-

= 50,000 x 10/100

= RS-5,000.

Y:-

= 30,000 x 10/100

= RS-3,000.

Apportioned in the ratio of interest to be allowed to the extent of profits available:-

X:-

= 5,000

-------------- x 4,800

8,000

= RS-3,000.

Y:-

= 3,000

------------- x 4,800

8,000

= RS-1,800.