CA Foundation · Accounting · Partnership and LLP Accounts
Sunita and Tarun are partners sharing profits 1:1. On 1 April, capitals were Sunita ₹3,00,000 and Tarun ₹2,00,000. On 1 October Sunita introduced ₹60,000 additional capital. Interest on capital is 8% p.a. What is the total interest on Sunita's capital for the year?
The total interest is ₹26,400. Interest on the opening capital of ₹3,00,000 for a full year at 8% is ₹24,000, and interest on the ₹60,000 introduced on 1 October for six months is ₹2,400.
- A₹24,000
- B₹26,400Correct
- C₹28,800
- D₹26,000
Explanation
Interest on opening capital: 3,00,000 × 8% = ₹24,000. Interest on additional capital for 6 months: 60,000 × 8% × 6/12 = ₹2,400. Total ₹26,400. Option ₹28,800 wrongly charges a full year on the additional capital.
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