Question

IRMS
FUNDAMENTALS
1.87
Drawings during 2004-05
Interest on Drawings
Partner's Salary
Partner's Commission
Interest on partner's loan
Interest on Capital
Share of Profit for 2004-05
48,000
1,440
2,000 per month
10.000
36,000
1,080
8,000
6%
40,000
6%
20,000
[Ans. Capital Account Balances : Ruchi 3,42,560 and Suchi 2,02,920.]​

Answer 1

Explanation:

Total drawings= 7500 * 4

=30000

Rate= 10%

Case 1: If he withdrew 7500 in the beginning of each quarter-

Note: When equal amount of drawings is withdrawn at the beginning of each quarter, interest is calculated for a period of 7.5 months.

Hence,

Interest on drawings= 30000 * 10/100 * 7.5/12

= 1875

Case 2: If he withdrew 7500 at the end of each quarter-

Note: When equal amount of drawings is withdrawn at the end of each quarter, interest is calculated for a period of 4.5 months.

Hence,

Interest on drawings= 30000 * 10/100 * 4.5/12

= 1125

Case 3: If he withdrew 7500 during the middle of each quarter-

Note: When equal amount of drawings is withdrawn during the middle of each quarter, interest is calculated for a period of 6 months.

Hence,

Interest on drawings= 30000 * 6/12 * 10/100

= 1500

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