How will you treat ‘Interest on Debentures’ while preparing a Cash Flow Statement? Post category:Accountancy Reading time:1 mins read SOLUTION It will be added to net profit in operating activities and will also be shown as outflow under financing activities. Please Share This Share this content Opens in a new window X Opens in a new window Facebook Opens in a new window Pinterest Opens in a new window LinkedIn Opens in a new window Viber Opens in a new window VK Opens in a new window Reddit Opens in a new window Tumblr Opens in a new window Viadeo Opens in a new window WhatsApp Read more articles Previous PostUnder which type of activity will you classify’ ‘Interest paid on long term borrowings’ while preparing Cash Flow Statement? Next PostInterest received and paid by a finance company is classified under which Kind of activity while preparing a Cash flow statement? (C.B.S. E. 2018) You Might Also Like What is meant by ‘Fixed Capital’ of a partner? (Delhi 2016 C) October 7, 2022 What does a low proprietary ratio indicate? October 3, 2022 Simrat and Bir are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019 after closing the books of account, their Capital Accounts stood at Rs. 4,80,000 and Rs. 6,00,000 respectively. On 1st May, 2018, Simrat introduced an additional capital of Rs. 1,20,000 and Bir withdrew Rs. 60,000 from his capital. On 1st October, 2018, Simrat withdrew Rs. 2,40,000 from her capital and Bir introduced Rs. 3,00,000. Interest on capital is allowed at 6% p.a. Subsequently, it was noticed that interest on capital @ 6% p.a. had been omitted. Profit for the year ended 31st March, 2019 amounted to Rs. 2,40,000 and the partners’ drawings had been: Simrat – Rs. 1,20,000 and Bir – Rs. 60,000. Compute the interest on capital if the capitals are (a) fixed, and (b) fluctuating. July 21, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.
Simrat and Bir are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019 after closing the books of account, their Capital Accounts stood at Rs. 4,80,000 and Rs. 6,00,000 respectively. On 1st May, 2018, Simrat introduced an additional capital of Rs. 1,20,000 and Bir withdrew Rs. 60,000 from his capital. On 1st October, 2018, Simrat withdrew Rs. 2,40,000 from her capital and Bir introduced Rs. 3,00,000. Interest on capital is allowed at 6% p.a. Subsequently, it was noticed that interest on capital @ 6% p.a. had been omitted. Profit for the year ended 31st March, 2019 amounted to Rs. 2,40,000 and the partners’ drawings had been: Simrat – Rs. 1,20,000 and Bir – Rs. 60,000. Compute the interest on capital if the capitals are (a) fixed, and (b) fluctuating. July 21, 2022