Question

3) How is interest on drawings calculated, if the drawings are made at regular intervals as on the first day of each month?

Answer 1

Answer:

Drawings can be made by partners in the beginning,middle or end of each month.

If a partner withdraws fixed amount in the middle of each month,interest will be calculated on his total drawings for a period of 6 months.

Here,as the drawings are made at regular intervals as on 15th day of each month,then Interest will be calculated for 6 months.

For Example:- If Rs. 3000 withdrawn in the middle of every month (interest on drawings @10%)

Interest on drawings= 3000*10%*6/12

= 150