00:01
In the given question we have to calculate the opening capital balance so we have made this schedule that shows the computation of opening capital balance now first of all we will be writing down the ending capital balance as on 31st march 2020 so the ending capital balance on 31st march 2020 for a it is given to be $160 ,000 and for b it's $140 ,000 so there were some drawings during the year so we will be adding back those drawings to the ending capital balance so add drawings made during the year and that is given $30 ,000 for each partner so for a also $30 ,000 and for b also 30 ,000 so after adding the drawings what we will be doing is we will be subtracting the profit share that should be added to the partners so less profit shares now the profit is given to us is 90 ,000 but on that 90 ,000 the interest on capital has to be subtracted then only the final balance that come that will is going to be shared among the partners so we need to find out those profit balance so we will be preparing a working note to find out the profits here so this will be our working notes so we know that the total capital balance or the total closing capital balance will be 160 ,000 dollars for a and 140 ,000 dollars for b so this total comes to 300 ,000 dollars now we will be adding the total drawings so the total drawings is of 30 ,000 for a and 30 ,000 for b and this comes to 60 ,000 dollars so now what we will be doing we will be subtracting the profit before charging interest and that comes to actually it's given in the question to be 90 ,000 so now this balance that comes is of two hundred seventy thousand dollars and this will be the total opening capital balance that is for a and b so since this amount is the total opening capital balance.
03:58
So now we can know what was the total interest on capital.
04:01
So total interest on capital will be the interest rate given to us is of 10%.
04:19
So 10 % of $270 ,000.
04:24
So $270 ,000 is the total capital into 10 % per annum.
04:30
Is the interest rate so that comes to $27 ,000.
04:37
So we know that total interest is of $27 ,000.
04:40
Now the second thing that we will be doing is the finding the profit share to be divided among partners.
05:10
So we have the balance of profit before charging interest.
05:15
So we will be writing down those balance.
05:16
So profit before charging interest on capital is given to be $90 ,000.
05:38
So less total interest on capital and that is we have calculated to be $27 ,000.
06:01
And the balance comes to $63 ,000...