A and B are partner in a firm. they withdrew rs.4000 and 5000 respectively from the at the end of each month. the interest is charged @ of 12% p.a. on their drawings. the book of the firm are closed on 31 december. calculate the interest on drawing of A and B.

Question

Answer

Calculation of Interest on Drawings of A and B

Step 1: Calculation of Total Drawings

A's total drawings = Rs. 4000 x 12 months = Rs. 48,000

B's total drawings = Rs. 5000 x 12 months = Rs. 60,000

Step 2: Calculation of Total Interest

A's interest on drawings = (Rs. 48,000 x 12%) = Rs. 5,760

B's interest on drawings = (Rs. 60,000 x 12%) = Rs. 7,200

Therefore, the interest on drawings of A and B is Rs. 5,760 and Rs. 7,200 respectively.

Explanation

Interest on drawings is the interest charged by the firm on the amount withdrawn by the partners for personal use. The interest is charged to compensate the firm for the loss of the use of the money. In this case, A and B withdrew Rs. 4000 and Rs. 5000 respectively at the end of each month. The total amount withdrawn by A and B in a year is calculated by multiplying the monthly withdrawal by 12 months. The interest on the total drawings is calculated by multiplying the total amount by the rate of interest charged by the firm.

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