Ansh and Abhi are partners sharing profits and losses in the ratio of 3 : 2. Their capital accounts showed balances of Rs. 3,00,000 and Rs. 4,00,000 respectively on April 01, 2024. Calculate interest on Ansh's Capital for the year ending March 31, 2025, if the partnership deed provides for interest on capital @ 8% p.a. and the firm earned a profit of Rs. 14,000 during the year.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 6,000
Interest on capital is a charge against profit only to the extent of the profit. Where the profit is less than the interest due, the whole profit goes as interest, and it is shared in the ratio of the interest due, not in the profit sharing ratio of 3 : 2.
Interest due to Ansh = Rs. 3,00,000 × 8% = Rs. 24,000
Interest due to Abhi = Rs. 4,00,000 × 8% = Rs. 32,000
Total interest due = Rs. 56,000, more than the profit of Rs. 14,000
Ratio of interest = 24,000 : 32,000 = 3 : 4
Ansh’s share = Rs. 14,000 × 3/7 = Rs. 6,000
Abhi’s share = Rs. 14,000 × 4/7 = Rs. 8,000
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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