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John, a partn...

Question

John, a partner in Modern Tours and Travels withdrew money during the year ending March 31, 2016 from his capital account, for his personal use. Calculate interest in drawings if rate of interest is $9$ per cent per annum and If he withdrew Rs. $3, 000$ per month at the beginning of the month.

Rs.

1, 485

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Rs.

2, 845

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Rs.

1, 755

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Rs.

1, 580

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Solution

The correct option is C Rs. $1, 755$
Using the average method:
Interest on drawings = (3,000 x 12) x 9/100 x [(longest outstanding period+shortest outstanding period)/2]/12
=(3,000 x 12) x 9/100 x [(12+1)/2]/12
=36,000 x 9/100 x 6.5/12
=1,755

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Case (h) If he withdrew Rs 15,000 during the middle of each quarter;

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John, a partner in Modern Tours and Travels withdrew money during the year ending March 31, 2016 from his capital account, for his personal use. Calculate interest in drawings if rate of interest is 9 per cent per annum and If he withdrew Rs. 3,000 per month at the beginning of the month.

The correct option is C Rs. 1,755Using the average method:Interest on drawings = (3,000 x 12) x 9/100 x [(longest outstanding period+shortest outstanding period)/2]/12=(3,000 x 12) x 9/100 x [(12+1)/2]/12=36,000 x 9/100 x 6.5/12=1,755

John, a partner in Modern Tours and Travels withdrew money during the year ending March 31, 2016 from his capital account, for his personal use. Calculate interest in drawings if rate of interest is $9$ per cent per annum and If he withdrew Rs. $3, 000$ per month at the beginning of the month.

The correct option is C Rs. $1, 755$
Using the average method:
Interest on drawings = (3,000 x 12) x 9/100 x [(longest outstanding period+shortest outstanding period)/2]/12
=(3,000 x 12) x 9/100 x [(12+1)/2]/12
=36,000 x 9/100 x 6.5/12
=1,755