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Partner A introduced additional capital of ₹60,000 on 1 July. The rate of interest on capital is 8% per annum, and the accounting year ends on 31 March. What amount of interest is payable on the additional capital?

Answer and explanation

Correct answer: ₹3,600

The additional capital remained in the business for 9 months, from 1 July to 31 March. Therefore, interest = \(₹60,000 \times 8\% \times \frac{9}{12} = ₹3,600\). Option B incorrectly applies the rate for the full 12 months. In the examination, count the period from July to March as 9 months.

Related tags

PartnershipAdjustmentsInterest On CapitalAdditional CapitalTime CalculationPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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