| David, Morgan and Peter are partners in a firm. They do not have partnership deed. Balance of Their Capital Accounts as on 1st April, 2020 are as follows: |
| David's Capital Account.................................................................................8,00,000 Credit |
| Morgan's Capital Account..............................................................................(1,00,000) Debit |
| Peter's Capital Account...................................................................................5,00,000 Credit |
| Additional Information : |
| Firm obtain a loan from the bank Rs. 1,00,000 @ 10% p. a. on 1st April 2020. |
| Mrs. David has given a loan to the firm on 1st October 2020 Rs.2,00,000 @ 8% p.a. interest. |
| Peter has given a loan of Rs. 50,000 to the firm on 1st April 2020 and claim 8% p.a. interest. |
| Firm has given a loan to Morgan Rs. 60,000 on 1st April 2020. |
| David has withdrawn Rs.20,000 during the year for his personal use in anticipation of profit. |
| Morgan wants to introduce his nephew (as a new partner) but David objects to it. |
| Peter claim that interest on capital is to be calculated @ 10% p.a. and interest on drawings @ 8% p.a. |
| How much interest on Bank Loan is to be paid by the firm? |
A) 6,000
B) 10,000
C) 5,000 with average period
D) No interest will be paid
Correct Answer: B
Solution :
10,000
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