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Money withdrawn by a partner on 1st July Rs. 20,000 and interest on drawings is fixed @ 6% (Books are closed on 31st March.) The amount of interest will be Rupees: a) 900 b) 1,200 c) 600 d) No interest will be charged. Correct answer is 'B'. Can you explain this answer?
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Money withdrawn by a partner on 1st July Rs. 20,000 and interest on dr...
Calculation of Interest on Drawings

Withdrawal Date: 1st July
Amount Withdrawn: Rs. 20,000
Interest Rate: 6%

Calculation:

- Number of Months since Withdrawal = 9 Months (July to March)
- Interest on Drawings = (Amount Withdrawn) x (Interest Rate) x (Number of Months since Withdrawal/12)
- Interest on Drawings = 20,000 x 6% x 9/12 = Rs. 1,200

Therefore, the amount of interest charged on the withdrawal of Rs. 20,000 on 1st July is Rs. 1,200. The correct answer is option (b).
Community Answer
Money withdrawn by a partner on 1st July Rs. 20,000 and interest on dr...
When date of drawings is given IoD is charged as follows:
Time left after the drawings =9months I.e 9/12
IOD=20000×6/100×9/12=900
So the correct answer is a)900
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Money withdrawn by a partner on 1st July Rs. 20,000 and interest on drawings is fixed @ 6% (Books are closed on 31st March.) The amount of interest will be Rupees: a) 900 b) 1,200 c) 600 d) No interest will be charged. Correct answer is 'B'. Can you explain this answer?
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