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Accountancy · 2025 · 3 marks
CBSE 2025 · Region 5 · Set 2 · Q17
Daya and Deena were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 1. On 1st April, $\displaystyle 2023$, their capital accounts showed balances of $\displaystyle 5,00,000$ and ₹ $\displaystyle 6,00,000$ respectively. The partnership deed provided for interest on capital @ $\displaystyle 12$% p.a. Show the treatment of interest on capital in the following cases if : (i) During the year ended 31st March, $\displaystyle 2024$, the firm earned a profit of ₹ $\displaystyle 2,00$,000. (ii) During the year ended 31st March, $\displaystyle 2024$, the firm earned a profit of ₹ $\displaystyle 66$,000.
Marking-scheme solution
(i)
Dr. Profit & Loss Appropriation A/c Cr.
31st
for the year ended March, $\displaystyle 2024$
Particulars Amount Particulars Amount
₹ ₹
Interest on Capital: P & L A/c (Net Profit) $\displaystyle 2,00,000$
Daya $\displaystyle 60,000$
Deena $\displaystyle 72,000$ ($\displaystyle 1$½) $\displaystyle 1,32,000$
Profit transferred to capital accounts:
Daya $\displaystyle 51,000$
Deena $\displaystyle 17,000$ $\displaystyle 68,000$
$\displaystyle 2,00,000$ $\displaystyle 2,00,000$
(ii)
Dr. Profit & Loss Appropriation A/c Cr.
31st
for the year ended March, $\displaystyle 2024$
Particulars Amount Particulars Amount
₹ ₹
Interest on Capital: P & L A/c (Net Profit) $\displaystyle 66,000$
Daya
Deena ($\displaystyle 1$½) $\displaystyle 66,000$
$\displaystyle 66,000$ $\displaystyle 66,000$
Alternatively
(i)
As the profit for the year is ₹$\displaystyle 2,00,000$, which is sufficient to pay the amount of interest on
capital due to partners, therefore, Full interest will be paid.
Daya’s interest on capital= ₹$\displaystyle 60,000$
Deena’s interest on capital= ₹$\displaystyle 72,000$
(ii)
As the profit for the year is ₹$\displaystyle 66,000$, which is less than the amount of interest on capital due
to partners, i.e. ₹$\displaystyle 1,32,000$ (₹$\displaystyle 60,000$+₹$\displaystyle 72,000$), therefore, interest will be paid to the extent of
available profits i.e. ₹$\displaystyle 66,000$ in the ratio of interest on capital ($\displaystyle 5$:$\displaystyle 6$).
Daya’s interest on capital= ₹$\displaystyle 30,000$
Deena’s interest on capital= ₹$\displaystyle 36,000$
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CBSE Class 12 Accountancy past-paper question from the 2025board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.