Question

Rakesh and Roshan are partners, sharing profits in the ratio of 3 : 2 with capitals of Rs 40,000 and Rs 30,000, respectively. They withdrew from the firm the following amounts, for their personal use

$\begin{array}{ccc}\text{Rakesh}& \text{Month}& \text{Amt. (Rs)}\\ & \text{May 31, 2006}& 600\\ & \text{June 30, 2006}& 500\\ & \text{August 31, 2006}& 1,000\\ & \text{November 1, 2006}& 400\\ & \text{December 31, 2006}& 1,500\\ & \text{January 31, 2007}& 300\\ & \text{March 1, 2007}& 700\\ \text{Rohan}& \text{At the beginning of each month}& 400\end{array}$

Interest is to be charged @ 6% pa. Calculate interest on drawings, assuming that book of accounts are closed on March 31, 2007, every year.

Answer 1

$\begin{array}{cccc}\text{Date}& \text{Amt.(Rs)}& \text{Period}& \text{Product}\\ \text{May 31, 2006}& 600& \text{10 months}& \text{6,000}\\ \text{June 30, 2006}& 500& \text{9 months}& 4,500\\ \text{August 31, 2006}& 1,000& \text{7 months}& 7,000\\ \text{November 1, 2006}& 400& \text{5 months}& 2,000\\ \text{December 31,2006}& 1,500& \text{3 months}& 4,500\\ \text{January 31, 2007}& 300& \text{2 months}& 600\\ \text{March 01, 2007}& 700& \text{1 months}& 700\\ \text{Total}& & & \underset{–}{\underset{–}{\overline{25,300}}}\end{array}$

Interest on Drawings of Rakesh

$\Rightarrow$ Sum of product $\times Rate\times \frac{1}{12}=25,300\times \frac{6}{100}\times \frac{1}{12}=Rs126.50$

Interest on Rohan's Drawings (By Average Method)

$\Rightarrow$ Total Drawings $\times Rate\times \frac{6\frac{1}{2}}{12}=4,800\times \frac{6}{100}\times \frac{13}{2\times 12}=Rs156$