Read the following passage and answer the question.
A, B and C are partners in a partnership firm sharing profits and loss in ratio of 2:2:1. Their fixed capitals are ₹10,00,000, ₹8,00,000 and ₹7,00,000 respectively. They withdrew some amount from the firm for their personal use. Partnership deed provide interest on drawings @10% p.a. but no interest on capital. Market rate of interest on capital in similar firm is 5% p.a. C also gives a loan of ₹1,00,000 to the firm without any agreement of interest whereas market rate of interest on loan is 12% p.a.
What will be the interest on drawings if C withdraws ₹60,000 at the end of each quarter?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- ₹9,000.
Total drawings = 60,000 x 4
= ₹2,40,000
Average period = (9+0) /2
= 4.5 months
Interest on drawings = 2,40,000*4.5/12*10/100
= ₹9,000