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Naresh and Sukesh are partners with capitals of ₹ 3,00,000 each as on 31st March, 2018. Naresh had withdrawn ₹ 50,000 against capital on 1st October, 2017 and also ₹ 1,00,000 besides the drawings against capital. Sukesh also had drawings of ₹ 1,00,000. Interest on capital is to be allowed @ 10% p.a. Net profit for the year was ₹ 2,00,000, which is yet to be distributed. Pass the journal entries for interest on capital and distribution of profit.

Answer»

entries are given below. Explanation:For Naresh: Capital at the year-end = Rs. 3,00,000 AMOUNT he withdrew = Rs, 50,000 Net PROFIT is 2,00,000 which is distributed equally, so Naresh’s amount will be = Rs, 1,00,000 Total = 4,50,000 (3,00,000 + 50,000 + 1,00,000) For SUKESH: Capital at the year-end = Rs. 3,00,000 Net profit is 2,00,000 which is distributed equally, so Sukesh’s amount will be = Rs, 1,00,000 Total = 4,00,000 (3,00,000 + 1,00,000) For CALCULATION of interest: Naresh Sukesh



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