Vivek, Virat and Vineet were partners in a firm. Their capital accounts as on April 1, 2019 showed a balance of Rs.4,00,000, Rs.6,00,000 and Rs.8,00,000 respectively. On 1st July 2019 Virat introduced additional capital of Rs.1,00,000 while Vineet withdraw 50,000 on 31 Oct 2019 from their capitals. Interest on capital is allowed @8%. Calculate Interest on capital to be given to each partner.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Vivek 32,000, Virat Rs.54,000, Vineet Rs.62,000
Interest on capital is calculated for the time each amount of capital stayed in the business during the year 2019-20 (1 April 2019 to 31 March 2020), at 8% per annum.
Vivek: Rs. 4,00,000 × 8% = Rs. 32,000
Virat: Rs. 6,00,000 × 8% = Rs. 48,000
Virat, additional capital: Rs. 1,00,000 × 8% × 9/12 (1 July 2019 to 31 March 2020) = Rs. 6,000
Virat total = Rs. 48,000 + Rs. 6,000 = Rs. 54,000
Vineet: Rs. 8,00,000 × 8% = Rs. 64,000
Vineet, less on the withdrawal: Rs. 50,000 × 8% × 5/12 (1 November 2019 to 31 March 2020) = Rs. 1,667
Vineet total = Rs. 64,000 − Rs. 1,667 = Rs. 62,333
Only Option (2) has Rs. 32,000 for Vivek and Rs. 54,000 for Virat, and its Rs. 62,000 for Vineet is the nearest to Rs. 62,333.
Note: It seems that there is a mistake in the original NTA paper. With the withdrawal on 31 October 2019, Vineet's interest works out to Rs. 62,333, which no option shows; Rs. 62,000 is the interest for a withdrawal on 30 September 2019 (Rs. 50,000 × 8% × 6/12 = Rs. 2,000 less). Option (2) is still the only option that fits all three partners.
NCERT (2026-27 edition):
|
