Question

A and B are partners sharing profits equally. A drew regularly Rs.4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a.

Answer 1

Calculation of interest on drawings:

Number of drawings = 6

Amount of each drawing = 4000

Total drawings = 6 x 4000 = 24000

Number of months = [Time left after 1st drawing + Time left after last drawing]/2

\(= \frac{6+1}2\)

= 3.5 months

Hence,

Interest on drawings = \(24000 \times \frac 5{100} \times \frac{3.5}{12}\)

= 350

Answer 2

Amount of drawings = 4,000