Partnership

Accounting

Medium

common

Himanshu withdrew Rs 2,500 at the end of each month. The partnership deed provides for charging of interest on drawings @ 12% p.a. Calculate interest on Himanshu's drawings for the year ended March 31, 2017

Rs 1,950

Rs 1,650

Rs 3,600

Rs 1,675

✅ Correct Option: 2

Given Information:

Monthly withdrawal = Rs 2,500 at the end of each month
Rate of interest = 12% p.a.
Period = 12 months (full year)

Calculation:

Total Drawings for the year = Rs 2,500 × 12 = Rs 30,000

When drawings are made at the end of each month, the time period for interest calculation uses the formula:

Average Time Period = $\frac{(n-1)}{2}$ months, where n = number of months

Average Time Period = $\frac{(12-1)}{2}$ = $\frac{11}{2}$ = 5.5 months

Interest on Drawings:

Interest = Total Drawings × Rate × $\frac{Time}{12}$

Interest = 30,000 × $\frac{12}{100}$ × $\frac{5.5}{12}$

Interest = 30,000 × $\frac{5.5}{100}$

Interest = Rs 1,650

The key point here is that since withdrawals happen at the end of each month, the first withdrawal (made at end of month 1) earns interest for 11 months, the second for 10 months, and so on, with the last withdrawal earning no interest. This averages out to 5.5 months using the formula $\frac{(n-1)}{2}$ .

Answer: Option 2 - Rs 1,650

2026: 29 May Shift 1

Under the Fluctuating Capital Method, how many accounts are prepared for all adjustments like undistributed profits, reserves, etc. related to partners?

2025: 31 May Shift 1

Amitabh and Babul are partners sharing profits in the ratio of 3:2, with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. Babul is to be allowed an annual salary of Rs. 2,500. Manager is to be allowed commission @ 5,000. Amitabh has also given a Loan on April 01 , 2019 of Rs. 50,000 to the firm without any agreement. During the year 2019-20, the profits earned is Rs. 22,250. Profit and Loss Appropriation account shows balance of the Profit and Loss A/c (Net profit before Babul's salary) amounted to:

2024

Match List-I with List-II

2026: 29 May Shift 1

If partnership deed is silent about the interest on capital contributed by the partners in the firm, then ......... on the contributed capital will be paid.

2025: 4 June Shift 2

Choose the correct statement if a partnership deed is not present.

2023: 28 May Shift 1

The steps in the Process of Preparing Profit and Loss Appropriation account are :

(A) Transfer the net profit to the credit side of P & L Appropriation A/c

(B) Divide the Profit among partners in the Profit Sharing ratio

(D) Debit the P & L Appropriation A/c with all appropriations like partners salary etc.

(E) Credit the P & L Appropriation A/c with interest on drawing and deficiency on account of partner's guarantee of earnings to the firm.

Choose the correct answer from the options given below :

Himanshu withdrew Rs 2,500 at the end of each month. The partnership deed provides for charging of interest on drawings @ 12% p.a. Calculate interest on Himanshu's drawings for the year ended March 31, 2017

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