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Standard XII

Accountancy

Interest Coverage Ratio

A and B are p...

Question

A and B are partners sharing profits equally. A drew regularly Rs. 4,000 in the beginning of every month for six months ended 30th September, 2018. Calculate interest on drawings @ 5% p.a. for a period of six month

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Solution

Calculation of interest on drawings:
Number of drawings = 6
Amount of each drawing= 4000
Total drawings= 64000
= 24000
Number of months= [Time left after 1st drawing + Time left after last drawing]/2
= [6+1]/2
= 3.5 months
Hence,
Interest on drawings= 24000 5/100 * 3.5/12
= 350

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P, Q and R are partners in a firm. You find that :

(i) P drew Rs 6,000 in the beginning of every month for 6 months ending 30th September, 2016.

(ii) Q drew Rs 6,000 at the end of every month for 6 months ending 30th September, 2016.

(iii) R drew Rs 6,000 in the middle of every month for 6 months ending 30th September, 2016.

Calculate interest on drawings at 8% p.a.

Q. X, a partner of X and Y Associates draw Rs, 4000 every month at the mid of the month for six months. Calculate interest on drawing at 5%.

Menon and Thomas are partners in a firm. They share profits equally. Their monthly drawings are Rs 2,000 each. Interest on drawings is to be charged @ 10% p.a. Calculate interest on Menon’s drawings for the year 2006, assuming that money is withdrawn: (i) in the beginning of every month, (ii) in the middle of every month, and (iii) at the end of every month.

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A and B are partners sharing profits equally. A drew regularly Rs. 4,000 in the beginning of every month for six months ended 30th September, 2018. Calculate interest on drawings @ 5% p.a. for a period of six month

Calculation of interest on drawings:Number of drawings = 6Amount of each drawing= 4000Total drawings= 6*4000 = 24000Number of months= [Time left after 1st drawing + Time left after last drawing]/2 = [6+1]/2 = 3.5 monthsHence,Interest on drawings= 24000 * 5/100 * 3.5/12 = 350

Calculation of interest on drawings:
Number of drawings = 6
Amount of each drawing= 4000
Total drawings= 64000
= 24000
Number of months= [Time left after 1st drawing + Time left after last drawing]/2
= [6+1]/2
= 3.5 months
Hence,
Interest on drawings= 24000 5/100 * 3.5/12
= 350