Question

Ram and Shyam were partners. Ram withdrew Rs. 18,000 at the beginning of each half year. Interest on drawings is chargeable @ 10% p.a. Calculate interest on the drawings for the year ending 31 December 2018 using average period.

Answer 1

Total amount of drawing = 18, 000 x 2 

= 36,000 

Interest on drawings = Amount x Rate of Interest x (Average Period)/12

= 36,000 x 10/100 x 9/12 

= Rs. 2700