Question

Geeta and Parul are partners in a firm. As per partnership deed interest on drawings is to be charged @ 4% p.a. Parul withdrew ₹ 5,000 per month at the end of each month for the first six months of the year. Accounts are closed on 31st March, 2024. Interest on drawings will be ______.

Options

• ₹ 950

• ₹ 250

• ₹ 850

• ₹ 600

Answer 1

Geeta and Parul are partners in a firm. As per partnership deed interest on drawings is to be charged @ 4% p.a. Parul withdrew ₹ 5,000 per month at the end of each month for the first six months of the year. Accounts are closed on 31st March, 2024. Interest on Drawings will be ₹ 850.

Explanation:

Total drawings = 5,000 × 6

= ₹ 30,000

The drawings are made at the end of each month; interest will be charged for 2.5 months.

Interest on drawings for first six months = `30,000 xx 4/100 xx 2.5/12`

= ₹ 250

Interest on drawings for last six months = `30,000 xx 4/100 xx 6/12`

= ₹ 600

Total interest on drawings = 250 + 600

= ₹ 850