Question

$A,B$ and $C$ started a firm on 1st October, 2017 sharing profits equally. $A$ drew regularly $Rs.4,000$ in the beginning of every month for the six months ended 31st March, 2018. $B$ drew regularly $Rs.4,000$ at the end of every month for the six months ended 31st March, 2018. $C$ drew regularly $Rs.4,000$ in the middle of every month for the six months ended 31st March, 2018.
Calculate interest on drawings @ $5\%$ p.a. for the period ending 31st March, 2018.

Answer 1

Calculation of Interest on Drawings

A= Average period= 6+1/2 =3.5 months

Interest on Drawings = 24,000*5%*3.5/12 = 350

B= Average Period= (5+0)/2 = 2.5 months

Interest on Drawings= 24,000*5%*2.5/12 = 250

C= Average period = (5.5+0.5)/2 = 3 months

Interest on drawings= 24000*5%*3/12= 300

Notes: Calculation of Average period

Average Period= Months left after first drawings+months left after last drawing/2