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Standard XII

Accountancy

Interest on Drawings-Withdrawn in the Middle of Every Month

Menon and Tho...

Question

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drawings is to be charged @ 10% p.a. Calculate interest on Menon’s drawings for the year 2006, assuming that money is withdrawn: (i) in the beginning of every month, (ii) in the middle of every month, and (iii) at the end of every month.

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Solution

Case (i)

If they withdraw money in the beginning of each month

Interest of drawings = Total drawings × Rate ×

Menon’s = 24,000 × = Rs 1,300

Thomas’s = 24,000 × = Rs 1,300

Case (ii)

If they withdraw in the middle of every month

Interest on Drawings = Total drawings ×

Menon’s = 24,000 × = Rs 1,200

Thomas’s = 24,000 × = Rs 1,200

Case (iii)

If they withdraw at the end of every month.

Interest on drawings = Total drawings ×

Menon’s = 24,000 × = Rs 1,100

Thomas’s = 24,000 × = Rs 1,100

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