Question

If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?

Answer 1

If a fixed amount is withdrawn on the first day of every quarter,then interest on the total amount withdrawn will be calculated for a period of 7 and half months (7½ months).

Explanation:

Average time period =  (time period of first drawing +  time period of last drawing)/2

Average time period = (12 + 3)/2

Average time period = 15/2  

Average time period = 7½ months

Hope this answer will help you….

 

Here are some more questions from this chapter :  

How will you deal with a change in the profit sharing ratio among existing partners? Take imaginary figures to illustrate your answer?

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Harshad and Dhiman are in partnership since April 01, 2016. No Partnership agreement was made. They contributed Rs 4,00,000 and 1,00,000 respectively as capital. In addition, Harshad advanced an amount of Rs 1,00,000 to the firm, on October 01, 2016. Due to long illness, Harshad could not participate in business activities from August 1, to September 30, 2017. The profits for the year ended March 31, 2017 amounted to Rs 1,80,000. Dispute has arisen between Harshad and Dhiman. Harshad Claims: (i) He should be given interest @ 10% per annum on capital and loan; (ii) Profit should be distributed in proportion of capital; Dhiman Claims: (i) Profits should be distributed equally; (ii) He should be allowed Rs 2,000 p.m. as remuneration for the period he managed the business, in the absence of Harshad; (iii) Interest on Capital and loan should be allowed @ 6% p.a. You are required to settle the dispute between Harshad and Dhiman. Also prepare Profit and Loss Appropriation Account.

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