Is drawings against profit is considered while calculating interest on capital?? I went through some of ur answers....but ur answer is entierly different from the way you approached the sum....

Is drawings against profit is considered while calculating interest on capital?? I went through some of ur answers....but ur answer is entierly different from the way you approached the sum.... • 9:35 Page 1.84 Solution to Q.23 Worki Notes: WNI: Calculation QfOpening Capital: Particulars Capital at the end Add: Drawings out of capital Add: Drawings against profit Capital at the beginning Naresh 50,000 Sukesh VVN2: Calculation of Interest on Capital Naresh - Sukesh - Rs 42,500 Rs 40,000 Exit

Dear Student


For Calculating interest on capital we always need opening capital, Because interest on capital is calculated on Opening capital or if any additional capital brought in. Therefore from additional capital all the necessary items are added or deducted for coming to opening capital .
 
Therefore all types of Drawings will be adjusted in Partner's Capital A/c so these should be added back to find Opening Capital.​ Hence Drawings against profits would be added to closing capital t get opening capital .
 



Regards

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Yes it will be calculated 
 
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