Vinod and Mohan are partners sharing profits and losses in the ratio of 4:3

28 :- Vinod and Mohan are partners sharing profits and losses in the ratio of 4:3. From the following balance sheet, Calculate interest on capital @6% p.a. for the year ended 31st March, 2025:

During the year, Vinod’s drawings were Rs 20,000 and Mohan’s drawings were Rs 12,000. Profit during the year was Rs 64,000.

Solution:-

Calculation of interest on Vinod’s capital
Opening capital of Vinod = Closing capital + Drawings – Share in profit
= Rs 1,60,000 + Rs 20,000 – ( Rs 64,000 – Rs 36,000) x 4/7
= Rs 1,60,000 + Rs 20,000 – Rs 16,000
= Rs 1,64,000
Interest on Vinod’s capital = Rs 1,64,000 x 6%
= Rs 9,840

Calculation of Interest on Mohan’s Capital
Opening capital of Mohan = Closing capital + Drawings – Share in profit
= Rs 80,000 + Rs 12,000 – ( Rs 64,000 – Rs 36,000) x 3/7
= Rs 80,000 + Rs 12,000 – Rs 12,000
= Rs 80,000
Interest on Mohan’s capital = Rs 80,000 x 6%
= Rs 4,800