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A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a.
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A and B are partners sharing profits equally. A drew regularly Rs 4,00...
Calculation of Interest on Drawings
Given:
- A and B are partners sharing profits equally.
- A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013.
- Interest on drawings is to be calculated at 5% p.a.
Calculation:
- Total drawings by A in six months = Rs 4,000 x 6 = Rs 24,000
- Average drawings by A = Rs 24,000/6 = Rs 4,000
- Interest on average drawings for six months = (5/100) x Rs 4,000 x 6/12 = Rs 100
- A's share in interest on drawings = 1/2 x Rs 100 = Rs 50
Explanation:
- A and B are partners sharing profits equally. Therefore, their profit sharing ratio is 1:1 or 1/2 : 1/2.
- A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. This means that A withdrew a total of Rs 24,000 in six months.
- Interest on drawings is calculated on the average amount of drawings made by the partner during the year. Therefore, we first calculate the average drawings made by A which is Rs 24,000/6 = Rs 4,000.
- Interest rate on drawings is given as 5% p.a. Therefore, we multiply the average drawings made by A with 5% and divide it by 12 to get the interest on average drawings for six months.
- Since A and B share profits equally, A's share in interest on drawings will be half of the total interest calculated. Therefore, A's share in interest on drawings is Rs 50.
Given:
- A and B are partners sharing profits equally.
- A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013.
- Interest on drawings is to be calculated at 5% p.a.
Calculation:
- Total drawings by A in six months = Rs 4,000 x 6 = Rs 24,000
- Average drawings by A = Rs 24,000/6 = Rs 4,000
- Interest on average drawings for six months = (5/100) x Rs 4,000 x 6/12 = Rs 100
- A's share in interest on drawings = 1/2 x Rs 100 = Rs 50
Explanation:
- A and B are partners sharing profits equally. Therefore, their profit sharing ratio is 1:1 or 1/2 : 1/2.
- A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. This means that A withdrew a total of Rs 24,000 in six months.
- Interest on drawings is calculated on the average amount of drawings made by the partner during the year. Therefore, we first calculate the average drawings made by A which is Rs 24,000/6 = Rs 4,000.
- Interest rate on drawings is given as 5% p.a. Therefore, we multiply the average drawings made by A with 5% and divide it by 12 to get the interest on average drawings for six months.
- Since A and B share profits equally, A's share in interest on drawings will be half of the total interest calculated. Therefore, A's share in interest on drawings is Rs 50.
Community Answer
A and B are partners sharing profits equally. A drew regularly Rs 4,00...
total drawings 4000 × 6m = 24000interest @5% because he is drawing beginning of every month then interest should be charged for 6.5 monthsinterest = 24000 × 5÷100 × 6÷12 × 6.5÷12 = 325 .
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A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a.
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A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a. for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a. covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a..
A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a. for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a. covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing profits equally. A drew regularly Rs 4,000 in the beginning of every month for six months ended 30th September, 2013. Calculate interest on drawings @ 5% p.a..
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