Question

Rishi is a partner in a firm. He withdrew the following amounts during the year ended March 31, 2007

(Rs)

May 01, 2006 12,000

July 31, 2006 6,000

September 30, 2006 9,000

November 30, 2006 12,000

January 01, 2007 8,000

March 01, 2007 7,000

Interest on Drawings is charged @ 9% pa.

Calculate interest on drawings.

Answer 1

Product Method
$\begin{array}{cccc}\text{Date}& \text{Amt. (Rs)}& \text{Period}& \text{Product}\\ \text{May 01, 2006}& 12,000& \text{11 Months}& 1,32,000\\ \text{July 31, 2006}& 6,000& \text{8 Months}& 48,000\\ \text{September 30, 2006}& 9,000& \text{6 Months}& 54,000\\ \text{November 30, 2006}& 12,000& \text{4 Months}& 48,000\\ \text{January 01, 2007}& 8,000& \text{3 Months}& 24,000\\ \text{March 01, 2007}& 7,000& \text{0 Months}& \\ & & & \underset{–}{\underset{–}{\overline{3,06,000}}}\end{array}$

Interest on Rishi's Drawings

$\Rightarrow$ Sum of Product $\times Rate\times \frac{1}{12}\Rightarrow 3,06,000\times \frac{9}{100}\times \frac{1}{12}=Rs2,295$