Question

Partner of a firm withdraw Rs. 6,000/- during the year. The accountant changed Rs, 300/- as interest on the same at 10% rate of interest. If it correct? Show the calculation.

Answer 1

Correct Interest on drawings = Amount of drawings x Rate of interest x 6/12 

= 6000 x 10/100 x 6/12 

= 300

Assumption : The date of drawings is not given. In such case the interest should be 6 months on the whole of the amount.