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Question 29 Chapter 2 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 29 Chapter 2 of +2- Part-
Q-29 - CH-2 - Usha +2 Book 2018 - Solution

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Question 29 Chapter 2 of +2-Part-1

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29. (Interest on Drawings/Drawings at beginning, middle and end of each month) A and B are partners in a firm. Their monthly drawings are Rs.2,000 each. Interest on drawings is to be charged @10% each.
Calculate interest on A’s drawings for the year 2016-17 assuming drawings are made
1.In the beginning of every month
2.In the middle of every month
3. At the end of every month.

The solution of Question 29 Chapter 2 of +2 Part-1: – 

Calculation of interest on partner’s Drawings
If partners withdrawal the same amount of drawing on a regular basis then we can calculate the interest on drawing with help of following formula: –
Interest on Drawing = Total Drawings X Rate of Interest X Period/12 Months
Rate of Interest = 10%
Period = the period/time will be calculated with the help of following formula: –

Period=Time left after 1st withdrawal+Time left after Last withdrawal
2

1. Calculation of interest on A’s Drawings:

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A’s withdrawal at the beginning of every month = 2,000 p.m.

Therefore, total drawings of the year 2,000 x 12 = Rs.24,000.
It means 1st withdrawal has made on 01-04-2016
So, Time left from 1-4-2016 to 1-3-17 is 12 Months
And last withdrawal has made on 1-3-2017
So, Time left from 1-3-2017 to 31-3-2017 is 1 month.

Now, put this time period in the formula

Period=12+1
2
Period=13
2
Period=6.5

Total Drawings = 24,000

Interest on Drawing=24,000X10X6.5
10012
       
Interest on Drawing=1300/-    

2. Drawings in the middle of every month

A’s withdrawal at the middle of every month = 2,000 p.m. Therefore, total drawings of the year= Rs.24,000.
It means 1st withdrawal has made on 15-04-2016
So, Time left from 15-4-2016 to 31-3-17 is 11 months and 15 days. = 11.5 months
And last withdrawal has made on 15-3-2017
So, Time left from 15-3-2017 to 31-3-2017 is 15 days = 0.5 month
Now, put this time period in the formula:

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Period=11.5+0.5
2
Period=12  
2
Period=6

Total Drawings = 24,000

Interest on Drawing=24,000X10X6
10012
       
Interest on Drawing=1200/-    

3. Drawings at the end of every month

A’s withdrawal at the end of every month = 2,000 p.m. Therefore, total drawings of the year= Rs.24,000.
It means 1st withdrawal has made on 31-04-2016
So, Time left from 31-4-2016 to 31-3-17 in 11 Months
And last withdrawal has made on 1-3-2017
So, Time left from 31-3-2017 to 31-3-2017 is 0 months.

Period=11.5+0
2
Period=11
2
Period=5
Interest on Drawing=24,000X10X5.5
10012
       
Interest on Drawing=1,100/-    

 

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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