Question 30 Chapter 2 of +2-A
Calculation of Interest on Partner’s Drawings: –
A and B are partners sharing profits equally. A drew regularly 4,000 at the beginning of every month for six months ended 30th September 2019. Calculate interest on drawings @ 5%p.a. for a period of six months.
The solution of Question 30 Chapter 2 of +2-A:
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 Drawing X Rate of Interest X Period/12 Months
Rate of Interest = 5%
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 | ||||
Withdrawal at the beginning of every month = 4,000 p. m.
It means 1st withdrawal has made on 01/04/2019
So, Time left from 01/04/2019 to 30/09/2019 is equal to 6 Months
And last withdrawal has made on 01/09/2019
So, Time left from 01/09/2019 to 30/09/2019 is equal to 1 Month only.
Now, put this time period in the formula
| Period | = | 6+1 | ||
| 2 | ||||
| Period | = | 7 | ||
| 2 | ||||
| Period | = | 3.5 |
| A’s total Drawing | = | 4,000 | x | 6 |
=24,000
| Interest on A’s Drawing | = | 24,000 | X | 5 | X | 3.5 |
| 100 | 12 |
Interest on A’s Drawing = 350/-
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Also, Check out the solved question of previous Chapters: –
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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
