alleryStart learning →A partner withdraws Rs 4,000 at the end of each quarter. Interest on drawings is 6 per cent per annum. The interest is:
ARs 600
BRs 480
CRs 360
DRs 240
Answer & Solution
Correct answer: C. Rs 360
1. Four quarterly withdrawals of Rs 4,000 give total drawings of Rs 16,000 for the year.
2. Drawings made at the end of each quarter carry an average period of 4.5 months.
3. Interest equals Rs 16,000 times 6 per cent times 4.5 divided by 12.
4. Working through, Rs 16,000 times 6 per cent is Rs 960, and Rs 960 times 4.5 over 12 gives Rs 360.
5. Option A would follow from using the beginning-of-quarter factor of 7.5, which is the standard error here.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 3 "Accounts of Partnership Firms - Fundamentals", Illustration 17_
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