SOLUTION
Amount advanced by the Partners = Rs. 30,000
Profit sharing ratio = 3: 2
Advanced by Sita = 30,000 × 3 / 5 = 18,000
Advanced by Geeta = 30,000 × 2 / 5 = 12,000
Time Period (from October 01, 2021 to March 31, 2022) = 6 months
Interest rate = 6% p.a.
Calculation of Interest on Advances
Interest on Sita’ s advance = 18,000 × 6 / 100 × 6 / 12 = 540
Interest on Geeta’ s advance = 12,000 × 6 / 100 × 6 / 12 = 360
Note: In the absence of a partnership agreement regarding rate of interest on loans and advances, interest is provided at 6% p.a.