Question:
Sudha and Sudhir were partners in a firm sharing profits and losses in the ratio of 4 : 1. On 1st April, 2023, their fixed capitals were ₹12,00,000 and ₹4,00,000 respectively. On 1st July, 2023, Sudha invested ₹2,00,000 as additional capital. On 1st August, 2023, Sudhir withdrew ₹50,000 from his capital.
The partnership deed provided for the following:
(i) Interest on capital @ 6% p.a.
(ii) Interest on drawings @ 8% p.a.
During the year, Sudha withdrew ₹60,000 and Sudhir withdrew ₹40,000 for personal use. After providing interest on capital and charging interest on drawings, the net profit of the firm for the year ended 31st March, 2024 was ₹3,50,000.
Prepare Current Accounts of Sudha and Sudhir.
Sudha and Sudhir were partners in a firm sharing profits and losses in the ratio of 4 : 1. On 1st April, 2023, their fixed capitals were ₹12,00,000 and ₹4,00,000 respectively. On 1st July, 2023, Sudha invested ₹2,00,000 as additional capital. On 1st August, 2023, Sudhir withdrew ₹50,000 from his capital.
The partnership deed provided for the following:
(i) Interest on capital @ 6% p.a.
(ii) Interest on drawings @ 8% p.a.
During the year, Sudha withdrew ₹60,000 and Sudhir withdrew ₹40,000 for personal use. After providing interest on capital and charging interest on drawings, the net profit of the firm for the year ended 31st March, 2024 was ₹3,50,000.
Prepare Current Accounts of Sudha and Sudhir.
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Interest on capital is calculated on time-weighted amounts. Adjust additional capital and withdrawals using months carefully.
Updated On: Dec 18, 2025
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Solution and Explanation
Sudha’s Current Account
| Dr. | Cr. | ||
|---|---|---|---|
| Particulars | ₹ | Particulars | ₹ |
| Drawings | 60,000 | Interest on Capital | 82,000 |
| Interest on Drawings | 2,400 | Profit transferred to Capital A/c | 2,80,000 |
| Total | 3,62,000 | ||
| Balance c/d | 2,99,600 | ||
| Total | 3,62,000 |
Sudhir’s Current Account
| Dr. | Cr. | ||
|---|---|---|---|
| Particulars | ₹ | Particulars | ₹ |
| Drawings | 40,000 | Interest on Capital | 22,500 |
| Interest on Drawings | 1,600 | Profit transferred to Capital A/c | 70,000 |
| Total | 92,500 | ||
| Balance c/d | 50,900 | ||
| Total | 92,500 |
Working Notes:
- Interest on Sudha’s Capital:
- ₹12,00,000 × 6% = ₹72,000 (for full year)
- Additional ₹2,00,000 × 6% × (9/12) = ₹10,000
- Total = ₹72,000 + ₹10,000 = ₹82,000
- Interest on Sudhir’s Capital:
- ₹4,00,000 × 6% = ₹24,000 (full year)
- Less: ₹50,000 withdrawn on 1st August → Interest saved for 8 months: ₹50,000 × 6% × (8/12) = ₹2,000
- Total = ₹24,000 - ₹2,000 = ₹22,000
- Interest on Drawings:
- Sudha: ₹60,000 × 8% × (6/12) = ₹2,400
- Sudhir: ₹40,000 × 8% × (6/12) = ₹1,600
- Profit Distribution: ₹3,50,000 in 4:1 ratio = ₹2,80,000 (Sudha), ₹70,000 (Sudhir)
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