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 B withdraw ₹90,000 in the middle of each quarter?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹18,000.
Total drawings = 90,000 x 4
= ₹3,60,000
Average period = (10.5+ 1.5) / 2
= 6 months
Interest on drawings = 3,60,000*6/12*10/100
= ₹18,000