Amit and Bhola are partners in a firm. They share profits in the ratio of 3:2. As per their partnership agreement, interest on drawings is to be charged @ 10% p.a. Their drawings during 2017 were Rs 24,000 and Rs 16,000, respectively. Calculate interest on drawings based on the assumption that the amounts were withdrawn evenly, throughout the year.

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Solution

Interest on Drawings = Drawings ×

Amit = 24,000 × = Rs 1,200

Bhola = 16,000 × = Rs 800

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Interest on Drawings = Drawings × Amit = 24,000 × = Rs 1,200 Bhola = 16,000 × = Rs 800

Interest on Drawings = Drawings ×

Amit = 24,000 × = Rs 1,200

Bhola = 16,000 × = Rs 800