Question

Interest on capital at 10% is to be allowed and 6% to be charged on drawing for 9 months

Answer 1

Answer:

(When drawings are made for a period of 6 months only). A, B and C are partners sharing profits equally. A drew regularly Rs.6,000 in the beginning .of every month for the six months ended 30th September, 2017. B drew regularly Rs.6,000 at the end of every month for the six months ended 30th September, 2017. C drew regularly Rs.6,000 in the middle of every month for the six months ended 30th September, 2017. Calculate interest on drawings @ 5% p.a. when the books are closed on 31st March every year.  

Medium

Solution

verified

Verified by Toppr

Average period = Months left after first drawings+Months left after last drawings/2

                                            A                             B                                    C

Average period=          (6+1)/2                        (5+0)/2                        (5.5+0.5)/2

                                    =3.5 months               = 2.5 months              = 3 months

Interest on drawings= (6000*6)*5%*3.5/12  (6000*6)*5%*2.5/12    (36000*5%*3/12)

                                 = 525                            =375                                 =450

Explanation: