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The amounts withdrawn were : ₹12,000 on June 01, 2019, ₹8,000; on August 31, 2019, ₹3,000; on September 30, 2019, ₹7,000, on November 30, 2019, and ₹6,000 on January 31, 2020.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.
The total amount of interest on drawings will be:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹1,755.
| DATE OF DRAWINGS | AMOUNT (₹) | MONTHS FOR WHICH DRAWINGS MADE | PRODUCT (₹) |
| June 01, 2019 | 12,000 | 10 | 1,20,000 |
| August 31, 2019 | 8,000 | 7 | 56,000 |
| September 30, 2019 | 3,000 | 6 | 18,000 |
| November 30, 2019 | 7,000 | 4 | 28,000 |
| January 31, 2020 | 6,000 | 2 | 12,000 |
| Total drawings | 2,34,000 | ||
Interest on drawings = Total product of drawings x Rate of interest/100 x 1/12
= 2,34,000 x 9/100 x 1/12
= ₹1,755