Partnership

Accounting

Easy

Comprehension:

Read the information carefully and answer the questions

A partner withdrew money during the year ending March 31, 2020 from his capital account, for his personal use.

The amounts withdrawn were: Rs. 12,000 on June 01, 2019, Rs. 8,000; on August 31, 2019, Rs. 3,000; on September 30, 2019, Rs. 7,000; on November 30, 2019, and Rs. 6,000 on January 31, 2020.

Calculate interest on drawings, if the rate of interest is 9 percent per annum.

Calculate Interest on drawings for the amount of Rs. 7000 withdrawn on November 30, 2019

700

630

210

315

✅ Correct Option: 3

Calculation of Interest on Drawings for Rs. 7,000 withdrawn on November 30, 2019:

The time period for which interest needs to be calculated is from the date of withdrawal to the end of the financial year.

Time Period Calculation:

From November 30, 2019 to March 31, 2020 = 4 months

(December, January, February, March)

Formula for Interest on Drawings:

$\text{Interest} = \frac{\text{Amount} \times \text{Rate} \times \text{Time}}{100}$

Where Time is expressed in years = $\frac{4}{12}$ years

Calculation:

$\text{Interest} = \frac{7,000 \times 9 \times 4}{100 \times 12}$

$= \frac{7,000 \times 9 \times 4}{1,200}$

$= \frac{2,52,000}{1,200}$

$= \text{Rs. } 210$

Answer: Option 3 (Rs. 210)

Note: Interest on drawings is always calculated from the date of withdrawal till the end of the accounting year (March 31, 2020 in this case). Since the amount was withdrawn on November 30, 2019, it remained withdrawn for 4 complete months till the year-end.

2025: 15 May Shift 2

Match List-I with List-II

Match the accounts with their purpose

List-I	List-II
(A) Profit and Loss adjustment A/c	(I) Changes in amount of capital
(B) Profit and loss appropriation A/c	(II) Generally no change in amount of capital
(C) Fixed capital A/c	(III) Errors and omissions found after preparation of final A/c
(D) Fluctuating capital method	(IV) Extention of Profit & loss A/c

Choose the correct answer from the options given below:

2026: 11 May Shift 2

Nagina, Pratap and Himesh are partners sharing profits and losses in the ratio of 5:3:2. The partnership deed provides for charging interest on drawings @ 5% p.a. The drawings of Nagina, Pratap and Himesh during the year ending March 31, 2025 amounted to Rs. 40,000, Rs. 15,000 and Rs. 15,000 respectively. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. Give necessary adjusting journal entry.

2026: 13 May Shift 1

Marry and Kayli were two partners sharing profits and losses in the ratio 5 : 7. Kayli was in need of funds, so she took a loan of Rs. 4,00,000 from the firm at an agreed rate of interest being 8% p.a. If Interest is charged on loan from the partner, it will be:

2025: 26 May Shift 2

Which of the following statements results in the reconstitution of a partnership firm :-

(A) Change in profit sharing ratio among partners.

(B) Admission of a new partner.

(D) Dissolution of a partnership.

Choose the correct answer from the options given below:

2023: 20 June Shift 2

Identify the way by which the clauses of partnership deed can be altered.

2026: 24 May Shift 1

If the partnership deed is silent regarding Interest on the partner's loan, the following provision of the Indian Partnership Act 1932 will be applicable:

Calculate Interest on drawings for the amount of Rs. 7000 withdrawn on November 30, 2019

Solution

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