Question

Suchi and Ruehl were partners in a firm sharing profits and losses equally. Throughout the year Ruchi withdrew ₹ 12,000 in the middle of each month. Interest on drawings is to be charged @ 6% p.a. as per partnership agreement. The average period for calculation of interest on drawings will be:

Options

• 6½ months

• 6 months

• 5½ months

• 1 months

Answer 1

Suchi and Ruehl were partners in a firm sharing profits and losses equally. Throughout the year Ruchi withdrew ₹ 12,000 in the middle of each month. Interest on drawings is to be charged @ 6% p.a. as per partnership agreement. The average period for calculation of interest on drawings will be 6 months.

Explanation:

Average period is considered to be 6 months when drawings are made at the middle of each month.