Partnership

Accounting

Medium

common

Calculate interest on drawing if Ram withdrew Rs. 3,000 per month at the beginning of each month for the whole year, if interest on drawing is charged @ 9 % per annum.

Rs. 1455

Rs. 1745

Rs. 1485

Rs. 1755

✅ Correct Option: 4

Since Ram withdrew Rs. 3,000 at the beginning of each month for the whole year, we need to calculate interest on these periodic drawings.

Total Drawings = Rs. 3,000 × 12 = Rs. 36,000

When equal amounts are withdrawn at the beginning of each month, the formula for interest on drawings is:

$\text{Interest on Drawings} = \text{Total Drawings} \times \frac{\text{Rate}}{100} \times \frac{\text{Time Period} + 1}{2 \times 12}$

The "+1" is added because drawings are made at the beginning of each month (if withdrawn at the end, we would use the formula without +1).

Time Period = 12 months (whole year)

Substituting the values:

$\text{Interest} = 36,000 \times \frac{9}{100} \times \frac{12 + 1}{2 \times 12}$

$= 36,000 \times \frac{9}{100} \times \frac{13}{24}$

$= \frac{36,000 \times 9 \times 13}{100 \times 24}$

$= \frac{4,212,000}{2,400}$

$= \text{Rs. } 1,755$

The average period for which drawings remain with Ram is 6.5 months (13/2 months), since the first drawing stays for 12 months and the last for 1 month.

Interest on Drawings = Rs. 1,755

2023: 11 June Shift 3

__________ is/are not true with regard to Limited liability partnership.

(A) Separate Legal entity

(B) Unlimited liability for one partner

(D) Perpetual Succession

(E) Unlimited liability of partners

Choose the correct answer from the options given below :

2025: 30 May Shift 2

Which of the following is the feature of fluctuating capital:

2022: 16 July Shift 2

A firm which maintains fixed capital had two partners Vimla and Kamla sharing profits in the ratio 1:1 The firm credited the partners with profit without interest on Capital which is allowed in the deed. Choose the correct option to pass a journal entry for the past adjustment if the Interest on capital Rs.2000 for Vimla Rs.3000 for Kamla

2025: 14 May Shift 1

If partnership deed is silent on the profit sharing ratio and other provisions: interest @_____ per annum is allowed on loans advanced by partners:

2026: 29 May Shift 1

The Profit or Loss on revaluation of accounts is transferred to:

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:

Calculate interest on drawing if Ram withdrew Rs. 3,000 per month at the beginning of each month for the whole year, if interest on drawing is charged @ 9 % per annum.

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)