Read the information carefully and answer the questions.
A partner withdrew money during the year ending March 31, 2020 from his capital account, for his personal use.
The amounts withdrawn were : ₹12,000 on June 01, 2019, ₹8,000; on August 31, 2019, ₹3,000; on September 30, 2019, ₹7,000, on November 30, 2019, and ₹6,000 on January 31, 2020.
Calculate interest on drawings, if the rate of interest is 9 percent per annum.
Calculate Interest on drawings for the amount ₹12,000 on June 1, 2019.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 900
The period for interest on drawings is counted from the date of withdrawal to the end of the accounting year. From June 1, 2019 to March 31, 2020 is 10 months.
Amount = Rs. 12,000; rate = 9% p.a.; period = 10 months
Interest = Rs. 12,000 × 9/100 × 10/12
= Rs. 900
Rs. 1,080 is 9% for the whole year; the drawing was not made at the start of the year, so the first two months carry no interest.
NCERT (2026-27 edition):
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