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Rajesh and Rakesh withrew for private use Rs.128000 and Rs. 86000 from their partnership firm . Interest is chargeable @ 6% per annum on drawings. Calculate interest on drawings.?
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Rajesh and Rakesh withrew for private use Rs.128000 and Rs. 86000 from...
**Interest on Drawings in Partnership**
In a partnership firm, partners may withdraw money for their personal use from the firm's funds. These withdrawals are known as drawings. However, the partners are required to pay interest on these drawings as they are using the firm's money for personal purposes.
**Calculation of Interest on Drawings**
To calculate the interest on drawings, we need to determine the amount of drawings made by each partner and calculate the interest on these amounts.
Let's consider the case of Rajesh and Rakesh. Rajesh has withdrawn Rs. 128,000 and Rakesh has withdrawn Rs. 86,000 from the partnership firm.
The interest on drawings is calculated as follows:
1. Determine the amount of drawings made by each partner:
- Rajesh's drawings: Rs. 128,000
- Rakesh's drawings: Rs. 86,000
2. Calculate the total drawings made by both partners:
- Total drawings = Rajesh's drawings + Rakesh's drawings
- Total drawings = Rs. 128,000 + Rs. 86,000
- Total drawings = Rs. 214,000
3. Calculate the interest on total drawings at the given rate of 6% per annum:
- Interest on drawings = Total drawings * Interest rate
- Interest on drawings = Rs. 214,000 * 6/100
- Interest on drawings = Rs. 12,840
Therefore, the interest on the drawings made by Rajesh and Rakesh from their partnership firm is Rs. 12,840.
**Explanation**
When partners withdraw money for personal use from the partnership firm, it is considered as drawings. The firm provides these funds to the partners based on their agreement. However, the partners need to pay interest on these drawings as they are using the firm's money for personal purposes.
The interest on drawings is calculated by multiplying the total drawings made by the partners by the interest rate. In this case, the total drawings made by Rajesh and Rakesh amount to Rs. 214,000. The interest rate is given as 6% per annum. Therefore, the interest on the drawings is calculated as Rs. 214,000 * 6/100 = Rs. 12,840.
This interest on drawings is recorded as an expense in the partnership firm's books and is distributed among the partners according to their profit-sharing ratios. It helps in compensating the firm for the use of its funds by the partners for personal purposes.
In a partnership firm, partners may withdraw money for their personal use from the firm's funds. These withdrawals are known as drawings. However, the partners are required to pay interest on these drawings as they are using the firm's money for personal purposes.
**Calculation of Interest on Drawings**
To calculate the interest on drawings, we need to determine the amount of drawings made by each partner and calculate the interest on these amounts.
Let's consider the case of Rajesh and Rakesh. Rajesh has withdrawn Rs. 128,000 and Rakesh has withdrawn Rs. 86,000 from the partnership firm.
The interest on drawings is calculated as follows:
1. Determine the amount of drawings made by each partner:
- Rajesh's drawings: Rs. 128,000
- Rakesh's drawings: Rs. 86,000
2. Calculate the total drawings made by both partners:
- Total drawings = Rajesh's drawings + Rakesh's drawings
- Total drawings = Rs. 128,000 + Rs. 86,000
- Total drawings = Rs. 214,000
3. Calculate the interest on total drawings at the given rate of 6% per annum:
- Interest on drawings = Total drawings * Interest rate
- Interest on drawings = Rs. 214,000 * 6/100
- Interest on drawings = Rs. 12,840
Therefore, the interest on the drawings made by Rajesh and Rakesh from their partnership firm is Rs. 12,840.
**Explanation**
When partners withdraw money for personal use from the partnership firm, it is considered as drawings. The firm provides these funds to the partners based on their agreement. However, the partners need to pay interest on these drawings as they are using the firm's money for personal purposes.
The interest on drawings is calculated by multiplying the total drawings made by the partners by the interest rate. In this case, the total drawings made by Rajesh and Rakesh amount to Rs. 214,000. The interest rate is given as 6% per annum. Therefore, the interest on the drawings is calculated as Rs. 214,000 * 6/100 = Rs. 12,840.
This interest on drawings is recorded as an expense in the partnership firm's books and is distributed among the partners according to their profit-sharing ratios. It helps in compensating the firm for the use of its funds by the partners for personal purposes.
Community Answer
Rajesh and Rakesh withrew for private use Rs.128000 and Rs. 86000 from...
Calculation of interest on drawing = Partner's Drawing × Rate/100
Rajesh = 128000 × 6/100
= 7680
Rakesh = 86000 × 6/100
= 5160
Rajesh = 128000 × 6/100
= 7680
Rakesh = 86000 × 6/100
= 5160
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Rajesh and Rakesh withrew for private use Rs.128000 and Rs. 86000 from their partnership firm . Interest is chargeable @ 6% per annum on drawings. Calculate interest on drawings.?
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Rajesh and Rakesh withrew for private use Rs.128000 and Rs. 86000 from their partnership firm . Interest is chargeable @ 6% per annum on drawings. Calculate interest on drawings.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Rajesh and Rakesh withrew for private use Rs.128000 and Rs. 86000 from their partnership firm . Interest is chargeable @ 6% per annum on drawings. Calculate interest on drawings.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rajesh and Rakesh withrew for private use Rs.128000 and Rs. 86000 from their partnership firm . Interest is chargeable @ 6% per annum on drawings. Calculate interest on drawings.?.
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