Ram and Mohan are partners in a business. Their capitals at the end of the year were ₹ 24,000 and ₹ 18,000 respectively. During the year, Ram’s drawings and Mohan’s drawings were ₹ 4,000 and ₹ 6,000 respectively. Profit (Before charging interest on capital) during the year was ₹ 16,000. Calculate interest on capital @ 5% p.a. for the year ended 31st March, 2018.

Ram and Mohan are partners in a business. Their capitals at the end of

1.	Ram and Mohan are partners in a business. Their capitals at the end of the year were ₹ 24,000 and ₹ 18,000 respectively. During the year, Ram’s drawings and Mohan’s drawings were ₹ 4,000 and ₹ 6,000 respectively. Profit (Before charging interest on capital) during the year was ₹ 16,000. Calculate interest on capital @ 5% p.a. for the year ended 31st March, 2018.
Answer» t on Ram's CAPITAL = 1000 Interest on Mohan's capital = 800Explanation:Calculation of capital at the beginning Particulars Ram MohanCapital at the end 24,000 18,000 Less: Profit already credited (1:1) (8,000) (8,000) Add: DRAWINGS already DEBITED 4,000 6,000 ∴ Capital at the beginning = 20,000 16,000Interest on Ram's capital = 20,000 x 5 = Rs. 1000 100Interest on Mohan's capital = 18,000 x 5 = Rs. 800 100

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