Question 29 Chapter 2 of +2-Part-1
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 Muthu’s Drawings:
A’s withdrawal at the beginning of every month = 2,000 p.m. Therefore, total drawings of the year= 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 | = | 24,000 | X | 10 | X | 6.5 |
| 100 | 12 | |||||
| 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 1-3-17 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:
| Period | = | 11.5 | + | 0.5 |
| 2 | ||||
| Period | = | 12 | ||
| 2 | ||||
| Period | = | 6 |
Total Drawings = 24,000
| Interest on Drawing | = | 24,000 | X | 6 | X | 6 |
| 100 | 12 | |||||
| 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 | = | 24,000 | X | 6 | X | 5.5 |
| 100 | 12 | |||||
| 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
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
