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Calculate Interest on Menon’S Drawings for the Year 2006 - Accountancy

Sum

Menon and Thomas are partners in a firm. They share profits equally. Their monthly drawings are Rs 2,000 each. Interest on drawings is to be charged @ 10% p.a. Calculate interest on Menon’s drawings for the year 2006, assuming that money is withdrawn: (i) in the beginning of every month, (ii) in the middle of every month, and (iii) at the end of every month.

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Solution

Case (i)
If they withdraw money in the beginning of each month

Interest of drawings = Total drawings × Rate × `13/[2 xx 12]`

Menon’s = 24,000 × `10/100 xx 13/[2 xx 12]` = Rs 1,300

Thomas’s = 24,000 × `10/100 xx 13/[2 xx 12]` = Rs 1,300

Case (ii)
If they withdraw in the middle of every month

Interest on Drawings = Total drawings × `10/100 xx 6/12`

Menon’s = 24,000 × `10/100 xx 6/12` = Rs 1,200

Thomas’s = 24,000 × `10/100 xx 6/12` = Rs 1,200

Case (iii)

If they withdraw at the end of every month.

Interest on drawings = Total drawings × `"Rate"/100` x `11/[2 xx 12]`

Menon’s = 24,000 × `10/100` x `11/[2 xx 12]` = Rs 1,100

Thomas’s = 24,000 × `10/100` x `11/[2 xx 12]` = Rs 1,100

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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 2 Accounting for Partnership Firms-Fundamentals
Exercise | Q 25 | Page 104
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