| On 1st may, 2021, A, B and C started a business with capitals of Rs.5,00,000, Rs.4,50,000 and Rs.4,00,000 respectively. According to partnership agreement: |
| (i) Profit earned in any year will be distributed as under: |
| Upto Rs.1,80,000 equally. |
| Excess over Rs.1,80,000 in ratio of 1:2:2 |
| (ii) Allow interest on capital @ 12% p.a. (Charge Against profit) and charge interest on drawings @ 9% p.a. |
| (iii) Business is being carried from the property owned by A on a monthly rent of Rs.5,000. |
| Drawings of the partners during the year were: |
| A withdrew regularly Rs.6,000 at the end of every month starting from 31.05.2021. |
| B withdrew regularly Rs.21,000 at the beginning of every Quarter starting from 01.07.2021. |
| C withdrew regularly 50,000 at the beginning of each six months starting from 01.06.2021. |
| Capital of the partner during the year were |
| On 01.10.2021 they decided that their capital should be 4,50,000 each |
| On 01.01.2022 Mr. C withdrew the amount of Rs.50,000 from his capital |
| The profit of the firm for the year before charging all of the above adjustments was Rs.5,00,000. |
| Interest on capital of C will be |
A) 45,500
B) 49,500
C) 47,000
D) 51,000
Correct Answer: A
Solution :
45,500
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