When the date of drawing is not given then it is assumed that drawings are made at the end of the year .Then why interest on drawings are charged on them that too for an average period when withdrawals are made at the end of the year?

Open in App

Solution

Siddhant,

When the date of drawings is not given, then the interest on drawings is charged for an average period of six months. Accordingly, interest is calculated on the amount withdrawn for 6 months at an agreed rate.

Suggest Corrections

Similar questions

If the date of withdrawal is not given, then the interest on drawings is calculated for an average period of ___

Q. If the date of withdrawal is not given, then the interest on drawings is calculated for an average period of ______ months.

[0.88 marks]

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drawings is to be charged @ 10% p.a. Calculate interest on Menon’s drawings for the year 2006, assuming that money is withdrawn: (i) in the beginning of every month, (ii) in the middle of every month, and (iii) at the end of every month.

Priya withdrew Rs 2,500 at the end of each month. The partnership deed provides for charging the interest on drawings @ 12 $%$ p.a. Calculate interest on Priya’s drawings for the year ending 31st December, 2017

Himanshu withdrews Rs 2,500 at the end month of each month. The partnership deed provides for charging the interest on drawings @ 12% pa. Calculate interest on Himanshu's drawings for they year ending 31 December, 2006.

Join BYJU'S Learning Program

When the date of drawing is not given then it is assumed that drawings are made at the end of the year .Then why interest on drawings are charged on them that too for an average period when withdrawals are made at the end of the year?

Siddhant, When the date of drawings is not given, then the interest on drawings is charged for an average period of six months. Accordingly, interest is calculated on the amount withdrawn for 6 months at an agreed rate.

Siddhant,

When the date of drawings is not given, then the interest on drawings is charged for an average period of six months. Accordingly, interest is calculated on the amount withdrawn for 6 months at an agreed rate.