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Question

Kanika and Gautam are partners doing a dry cleaning business in Lucknow, sharing profits in the ratio 2 : 1 with capitals ₹ 5,00,000 and ₹ 4,00,000 respectively. Kanika withdrew the following amounts during the year to pay the hostel expenses of her son:
1st April ₹ 10,000
1st June ₹ 9,000
1st November ₹ 14,000
1st December ₹ 5,000
Gautam withdrew ₹ 15,000 on the first day of April, July, October and January to pay rent for the accommodation of his family. He also paid ₹ 20,000 per month as rent for the office of partnership which was in a nearby shopping complex.
Calculate interest on drawings @ 6% p.a.

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Solution

Interest on Kanika’s Drawings = Rs 1,500

Interest on Gautam’s Drawings = Rs 2,250

Working Notes:

WN1: Calculation of Interest on Kanika’s Drawings

By Product Method

Date

Amount

(I)

Months

(II)

Product

(I × II)

Apr. 01

10,000

12

1,20,000

June 01

9,000

10

90,000

Nov. 01

14,000

5

70,000

Dec. 01

5,000

4

20,000

Sum of Product

3,00,000

WN2: Calculation of Interest on Gautam’s Drawings

Gautam withdrew Rs 15,000 in the beginning of every quarter.


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