# Question 35 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 35 Chapter 2 of +2-A

Calculation of Interest on Partner’s Drawings: –

35. A and B are partners sharing Profit and Loss in the ratio 3: 2 having Capital Account balances of 50,000 and 40,000 on 1st April 2018. On 1st July 2018, A introduced 10,000 as his additional capital whereas B introduced only 1,000. Interest on capital is allowed to partners @ 10% p.a.
Calculate interest on capital for the financial year ended 31st March 2019.

The solution of Question 35 Chapter 2 of +2-A

:

Calculation of Interest on A’s Capital by Product Method
We will do it with the product method because of Kanika withdrawal a different amount every time.

 Period Amount of A’s Capital(A) Period Left after(B) Product(C=A*B) April 01, 2018, to June 30, 2018 50,000 3 1,50,000 July 01, 2018, to March 31, 2019 60,000 9 5,40,000 Sum of Product 6,90,000

Interest on Capital = Sum of Product X Rate of Interest X 1/12

 Interest on A’s Capital = 6,90,000 X 10 X 1 100 12

Interest on A’s Capital = 5,750/-

Calculation of Interest on B’s Capital by Product Method
We will do it with the product method because of Kanika withdrawal a different amount every time.

 Period Amount of A’s Capital(A) Period Left after(B) Product(C=A*B) April 01, 2018, to June 30, 2018 40,000 3 1,20,000 July 01, 2018, to March 31, 2019 41,000 9 3,69,000 Sum of Product 4,89,000

Interest on Capital = Sum of Product X Rate of Interest X 1/12

 Interest on A’s Capital = 4,89,000 X 10 X 1 100 12

Interest on A’s Capital = 4,075/-

Case 2

Calculation of interest on partner’s Drawings
Withdrawal at the end of each quarter = 7,500 p.m
It means 1st withdrawal has made on 30/06/2019
So, Time left from 30/06/2019 to 31/03/2020
are 9 Months

And last withdrawal has made on 31/03/2020
So, Time left from 31/03/2020 to 31/03/2020
are 0 Months
Now, put this time period in the formula
 Period = 9 + 0 2
 Period = 9 2
 Period = 4.5
 total Drawing = 7,500 * 4

=30,000

 Interest on Ashok’s Drawing = 30,000 X 10 X 4.5 100 12

Interest on A’s Drawing = 1,125/-

Case 3

Calculation of interest on partner’s Drawings
Withdrawal at the end of each quarter = 7,500 p.m
It means 1st withdrawal has made on 15/05/2019
So, Time left from 15/05/2019 to 31/03/2020
are 10.5 Months
And last withdrawal has made on 15/02/2020
So, Time left from 15/02/2020 to 31/03/2020
are 1.5 Months
Now, put this time period in the formula

 Period = 10.5 + 1.5 2
 Period = 12 2
 Period = 6
 total Drawing = 7,500 * 4

=30,000

 Interest on Ashok’s Drawing = 30,000 X 10 X 6 100 12

Interest on A’s Drawing = 1,500/-

Comment if you have any questions.

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

### 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. 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