Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

If Amit, a partner, withdrew ₹10000 per month in the end, what will be the amount of interest on the drawing if it is calculated @ 8% p.a.?

Options:

₹9600

₹4800

₹5200

₹4400

Correct Answer:

₹4400

Explanation:

When the amount is withdrawn at the end of each month
Average Period = (No. of months of 1 drawings + No. of months of last drawings)/2
               = (11+0)/ 2
                = 5.5 months
Total drawings = 10000 X 12 = ₹120000
Interest on drawings =120000 X 8/100 X 5.5/12
                              = ₹4400