x,y and z are partners in a firm. Their capital is 20000;10000&and 4000 respectively, on which they are entitled to receive 5%interest. before providing interest on capital, the years profit was 1100. pass necessary journal entries in the book of the firm when interest on capital is provided share
Answer (1)
3rd Dec, 2020
Hi Candidate,
Three people X, Y, and Z have to get a 5 percentage of interest upon their capital investment, and the extra money they get through investing is termed as profit.
X has a capital of 20,000 on which he gets a 5% interest= 5/100*20000= 1000. Y has a capital of 10,000 and 5% intrest= 500. Z has a capital of 4000 with 5% interest= 200. So, the total profit earned by three of them= 1000+500+200= 1700.
Hope that this answer helps you!!
Comments (0)
