Question

A partner draws ₹ 2,000 each on 1st April 2023, 1st July 2023, 1st October, 2023 and 1st January 2024. For the year ended 31st March, 2024 interest on drawings @ 8% per annum will be ______.

Options

• ₹ 540

• ₹ 320

• ₹ 960

• ₹ 400

Answer 1

A partner draws ₹ 2,000 each on 1st April 2023, 1st July 2023, 1st October, 2023 and 1st January 2024. For the year ended 31st March, 2024 interest on drawings @ 8% per annum will be ₹ 400.

Explanation:

1. 1st April 2023 – ₹ 2,000

Time period: 12 months (from 1st April 2023 to 31st March 2024)

Interest on Drawing = `2,000 xx 8/100 xx 12/12`

= ₹ 160

2. 1st July 2023 – ₹ 2,000

Time period: 9 months (from 1st July 2023 to 31st March 2024)

Interest on Drawing = `2,000 xx 8/100 xx 9/12`

= ₹ 120

3. 1st October 2023 – ₹ 2,000

Time period: 6 months (from 1st October 2023 to 31st March 2024)

Interest on Drawing = `2,000 xx 8/100 xx 6/12`

= ₹ 80

4. 1st January 2024 – ₹ 2,000

Time period: 3 months (from 1st January 2024 to 31st March 2024)

Interest on Drawing = `2,000 xx 8/100 xx 3/12`

= ₹ 40

Total Interest on Drawings = ₹ 160 + ₹ 120 + ₹ 80 + ₹ 40

= ₹ 400