Q.Sumathi is a partner in a firm. She withdraws ₹ 5,000 p.m. regularly. Interest on Drawings is charged @ 4% p.a. Calculate the interest on Drawings using average period, if she draws
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Start your 14-day free trial to unlock the full solution →Interest on ₹60,000 total drawings @ 4% p.a. by average period: ₹1,300 (beginning of month) and ₹1,200 (middle of month).
Concept (TN HSC Class-12 Accountancy — Partnership Fundamentals): When a fixed amount is drawn at regular intervals, interest on drawings is computed on the total drawings for the average period the money is used.
Average period = (months for first drawing + months for last drawing) ÷ 2.
Total drawings = ₹5,000 × 12 = ₹60,000.
(i) Drawn at the beginning of every month
First drawing (1 January) is used for 12 months, last (1 December) for 1 month.
Average period = (12 + 1) ÷ 2 = 6.5 months.
| Item | Amount |
|---|---|
| Total drawings | ₹60,000 |
| Rate | 4% p.a. |
| Average period | 6.5 months |
| Interest = 60,000 × 4/100 × 6.5/12 | ₹1,300 |
(ii) Drawn in the middle of every month …
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