Partnership

Accounting

Medium

common

M and N are partners in a firm and agree that an interest @12% per annum should be charged on drawings. M draws Rs. 20,000 per month at the beginning of each month. The amount of interest to be charged from M is:

Rs. 14,400

Rs. 13,200

Rs. 15,600

Rs. 15,200

✅ Correct Option: 3

M draws Rs. 20,000 per month at the beginning of each month for 12 months.

Total drawings for the year = Rs. 20,000 × 12 = Rs. 2,40,000

Since drawings are made at the beginning of each month, each drawing earns interest for different periods:

January drawing → interest for 12 months
February drawing → interest for 11 months
March drawing → interest for 10 months
... and so on
December drawing → interest for 1 month

For equal monthly drawings at the beginning of each month, the average time period = 6.5 months

This is calculated as: $(12 + 11 + 10 + ... + 1) ÷ 12 = 78 ÷ 12 = 6.5$ months

Interest on drawings = Total Drawings × Rate × $\frac{\text{Average Period}}{12}$

Interest = 2,40,000 × $\frac{12}{100}$ × $\frac{6.5}{12}$

Interest = 2,40,000 × 0.065

Interest = Rs. 15,600

Note: If drawings were made at the end of each month, the average period would be 5.5 months instead of 6.5 months.

2026: 29 May Shift 1

Arrange the following steps in sequence, related to calculation of goodwill by capitalisation of super profits method.

(A) Calculate super profits.

(B) Multiply the super profits by the required rate of return multiplier

(C) Calculate capital of the firm, which is equal to total assets (excluding goodwill and fictitious assets) minus outside liabilities.

(D) Calculate normal profits on capital employed and average profits for past years,

Choose the correct answer from the options given below:

2025: 27 May Shift 2

J and K are partners sharing profits and losses in the ratio of 3:1. Their capitals at the end of the financial year 2024-2025 were Rs. 1,50,000 and Rs. 75,000 respectively. During the year 2024-2025, J’s drawings were Rs. 20,000 and the drawings of K were Rs. 5,000, which had been duly debited to partner’s capital accounts. Profit before charging interest on capital for the year was Rs. 16,000. The same had also been credited in their profit sharing ratio. K had brought additional capital of Rs. 16,000 on October 1, 2024. Calculate interest on capital @ 12% p.a. for the year 2024-2025 for J.

2023: 28 May Shift 1

Partnership deed should be drafted and prepared as per :

2024

Match List-I with List-II

2022: 20 Aug Shift 2

If Amit, a partner, withdrew Rs. 10,000 per month in the end, what will be the amount of interest on drawing if it is calculated @ 8 % p.a.?

2026: 29 May Shift 1

The partnership deed of a partnership firm includes:

(A) Salaries and Commission payable to partners

(B) Rules regarding the operation of bank accounts

(D) The Accounting period of the firm

Choose the correct answer from the options given below:

M and N are partners in a firm and agree that an interest @12% per annum should be charged on drawings. M draws Rs. 20,000 per month at the beginning of each month. The amount of interest to be charged from M is:

Solution

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