Capital Interest

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2010 Dear Sirs/ Madam,
Please guide how to calculate the Interest on Capital to the partners of the firm

On the balance on balance sheet as on 31.03.0000 except current year profit

or

On the daily balance basis

Please explain with example

Thanks & regards,

Aditya Maheshwari

Aditya Maheshwari (Expert)
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05 August 2010 It should be on daily balances.

VINOD ARORA

VINOD ARORA (Expert)
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05 August 2010 You have to consider end of day balance and 365/366 days(as may be applicable) in a year and calculate.

Suppose there is a credit on 10th march for 100000 Rs, and the amount is withdrawn on 30th March. you have to calculate interest for 20 days(10th inclusive and 30 exclusive) at applicable rate with denominator being 365(for year 2010).

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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05 August 2010 yes, interest will be calculate on daily basis....as per example given by vinodji..and also when ever partner give capital then from there to at the end calculation as per period of use of captital and if reducing from any partner then calculation create difference.

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