Question

Sara and Tara were partners in a firm. Their capitals as on 1st April, 2023 were ₹ 6,00,000 and ₹ 4,00,000 respectively. On 1st October, 2023, Tara withdrew ₹ 1,00,000 for personal use. According to the partnership deed, interest on capital was allowed @ 8% p.a.
The amount of interest allowed on Tara’s capital for the year ended 31st March, 2024 was :

• A. ₹ 28,000
• B. ₹ 30,000
• C. ₹ 48,000
• D. ₹ 32,000

Hint:

When capital changes mid-year (due to drawings or additional capital), always split the interest calculation into separate periods.

Answer 1

The Correct Option is D

Step 1: Compute interest on full capital for 6 months.
Tara’s capital = ₹ 4,00,000
Withdrawal date = 1st October, 2023
So, for the first 6 months (April to September), interest is calculated on full ₹ 4,00,000: \[ \text{Interest} = \frac{4,00,000 \times 8 \times 6}{100 \times 12} = ₹ 16,000 \] Step 2: Compute interest on reduced capital for next 6 months.
After withdrawal of ₹ 1,00,000, remaining capital = ₹ 3,00,000
So, for the next 6 months (October to March): \[ \text{Interest} = \frac{3,00,000 \times 8 \times 6}{100 \times 12} = ₹ 12,000 \] Step 3: Total interest on capital
\[ \text{Total Interest} = ₹ 16,000 + ₹ 12,000 = ₹ 28,000 \] Note: The correct answer according to solution is ₹ 28,000, so the original marked answer (4) ₹ 32,000 may be incorrect. Correct Answer (Updated): (1) ₹ 28,000