In this question,
The interest on capital should be calculated on the capital that is net of drawings , i.e. Rs (77,000 - 15,000) i.e. Rs 62,000 right?
It is given that the partner withdrew Rs 15,000 on 1st April 2014 and the balance sheet is given as on 31st March 2014 right? Please explain!
Dear Student,
Interest on Capital is always calculated exclusively on capital, interest on drawings has no relation with interest on capital. Both of these items should be calculated differently.
Regards
Interest on Capital is always calculated exclusively on capital, interest on drawings has no relation with interest on capital. Both of these items should be calculated differently.
Regards