Question

Kevin and Francis are partners. Kevin draws ₹ 5,000 at the end of each quarter. Interest on drawings is chargeable at 6% p.a. Calculate interest on drawings for the year ending 31^st March 2019 using the average period.

Answer 1

Total amount of drawings: 5000 × 4 = 20,000

Interest on drawings = Amount × Rate of Interest × `"Average period"/12`

= `20,000 xx 6/100 xx 4.5/12`

= ₹ 450