Partnership

Amit, Babu and Charu set up a partnership firm on April 1, 2022. They contributed ₹50,000, ₹40,000 and ₹30,000, respectively as their capitals and agreed to share profits and losses in the ratio of 2 : 2 : 1. Amit is to be paid a salary of ₹1,000 per month and Babu, a commission of ₹5,000. It is also provided that interest to be allowed on capital at 6% p.a. The drawings for the year were Amit ₹6,000, Babu ₹4,000 and Charu ₹2,000. Interest on drawings of ₹300 was charged on Amit's drawings, ₹200 on Babu's drawings and ₹100, on Charu's drawings. The net profit as per Profit and Loss Account for the year ending March 31, 2023 was ₹55,000 before charging manager's commission. Manager was allowed commission @ 10% on net profit after charging such commission.

From the above information answer.

Interest allowed on Charu's capital is:

₹1,800

The correct answer is Option (3) → ₹1,800.

Charu's capital = 30,000

Interest on capital = 6% p./a.

Interest = 30,000 x 6/100
            = 1,800