Prof. Sushma Gupta

Question

A partner withdrew ₹2,000 at the beginning of each month for personal use. Interest on drawings is charged at 10% per annum. What is the total interest on drawings? A). ₹1,200 B). ₹1,300 C). ₹1,100 D). ₹2,400

Edvaya · Accepted Answer

The correct answer is ₹1,300. **Answer: ₹1,300** When a fixed amount is withdrawn at the **beginning of each month**, the interest is calculated using the **average period method**: $$	ext{Total drawings} = ₹2,000 	imes 12 = ₹24,000$$ For withdrawals at the **beginning of each month**, the average time period = $\frac{12 + 1}{2} = 6.5$ months. $$	ext{Interest on drawings} = ₹24,000 	imes \frac{10}{100} 	imes \frac{6.5}{12} = ₹1,300$$ **Quick reference — Average period formulas:** | Timing of Withdrawal | Average Period | |---|---| | Beginning of each month | 6.5 months | | End of each month | 5.5 months | | Middle of each month | 6 months |

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Accountancy > Accounting For Partnership Firms > Fundamentals Of Partnership

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