J and K are partners sharing profits and losses in the ratio of 3:1 . Their capitals at the end of the financial year 2024-2025 were Rs. 1,50,000 and - Accountancy MCQ CUET Accountancy 2025 27 May Shift 2 2026 | ExamTest.live

hardMCQCUET Accountancy 2025 27 May Shift 22026Accountancy

1 mark

J and K are partners sharing profits and losses in the ratio of 3 : 1 . Their capitals at the end of the financial year 2024-2025 were Rs. 1, 50, 000 and Rs. 75, 000 respectively. During the year 2024-2025, J’s drawings were Rs. 20, 000 and the drawings of K were Rs. 5, 000, which had been duly debited to partner’s capital accounts. Profit before charging interest on capital for the year was Rs. 16, 000 . The same had also been credited in their profit sharing ratio. K had brought additional capital of Rs. 16, 000 on October 1, 2024. Calculate interest on capital @ 12% p.a. for the year 2024-2025 for J.

Solution & Step-by-step Explanation

Interest on capital is always calculated on the opening balance of the capital.Step 1: Compute J's share of profits distributed.Total Profit = Rs. 16, 000 Profit Sharing Ratio = 3 : 1 $ J’s share of profit = 16, 000 \times \frac{3}{4} = Rs. 12, 000 St e p 2 : F in d t h e Op e nin g C a p i t a l ba l an ce f or J . Opening Capital = Closing Capital + Drawings - Share of Profit - Additional Capital $ Opening Capital of J = 1, 50, 000 + 20, 000 - 12, 000 - 0 = Rs. 1, 58, 000 Step 3: Calculate interest on opening capital for J. Interest on Capital = 1, 58, 000 \times 12% = Rs. 18, 960

Try it yourself before checking the explanation above.

J and K are partners sharing profits and losses in the ratio of 3 : 1 . Their capitals at the end of the financial year 2024-2025 were Rs. 1, 50, 000 and Rs. 75, 000 respectively. During the year 2024-2025, J’s drawings were Rs. 20, 000 and the drawings of K were Rs. 5, 000, which had been duly debited to partner’s capital accounts. Profit before charging interest on capital for the year was Rs. 16, 000 . The same had also been credited in their profit sharing ratio. K had brought additional capital of Rs. 16, 000 on October 1, 2024. Calculate interest on capital @ 12% p.a. for the year 2024-2025 for J.

Rs. 3,960

Rs. 7,200

Rs. 8,160

Rs. 18,960

Practice with timed mock tests and track your performance across Accountancy.