X and Y are partners in a firm. They withdrew @ ₹ 1,500 and ₹ 1,000 respectively on 15th day of every…
When a partner withdraws a fixed amount on the 15th day (middle) of every month throughout all 12 months of the year, interest on total annual drawings is computed for an…
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X and Y are partners in a firm. They withdrew @ ₹ 1,500 and ₹ 1,000 respectively on 15th day of every months for all the twelve months during 2009. Interest on drawings is chargeable @ 10% per annum. What would be the interest on drawings respectively ?
Answer and explanation
Correct answer B
When a partner withdraws a fixed amount on the 15th day (middle) of every month throughout all 12 months of the year, interest on total annual drawings is computed for an average period of 6 months. For X, total annual drawings are ₹1,500 × 12 = ₹18,000, so interest at 10% p.a. is ₹18,000 × (10/100) × (6/12) = ₹900; for Y, total annual drawings are ₹1,000 × 12 = ₹12,000, so interest is ₹12,000 × (10/100) × (6/12) = ₹600.
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UGC NET Commerce