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12th Class Accountancy Fundamentals of Partnership Question Bank MCQs - Accounting for Partnership Firm : Fundamental

  • question_answer
    The capital balance of a partner at the end of the year (after adjusting for this drawings Rs.3,500 and his share in the profit Rs.2,300) is Rs.12,000. Interest on capital is payable to him at 5% per annum. What will be the amount of interest on capital?

    A) Rs.660                 

    B) Rs.600

    C) Rs.5,400              

    D) None of these

    Correct Answer: A

    Solution :

    [a] Rs.660  
    Hint: Capital at the Beginning
    = Capital at the End + Drawings - Profit
    = 12,000 + 3,500 - 2,300 = Rs.13,200
    Interest on Capital = 13,200  \[\times \frac{5}{100}\] = Rs.660
     


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