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Question
Rishi is a partner in a firm. He withdrew the following amounts during the year ended March 31, 2018.
| May 01, 2017 | Rs 12,000 |
| July 31, 2017 | Rs 6,000 |
| September 30, 2017 | Rs 9,000 |
| November 30, 2017 | Rs 12,000 |
| January 01, 2018 | Rs 8,000 |
| March 31, 2018 | Rs 7,000 |
Interest on drawings is charged @ 9% p.a. Calculate interest on drawings.
Solution
Product Method
|
|
Drawings × Period |
Product |
|
01 May, 2017 to 31 March 2018 |
12,000 × 11 = |
1,32,000 |
|
31 July, 2017 to 31 March 2018 |
6,000 × 8 = |
48,000 |
|
30 September, 2017 to 31 March 2018 |
9,000 × 6 = |
54,000 |
|
30 Nov. 2017 to 31 March 2018 |
12,000 × 4 = |
48,000 |
|
01 Jan. 2018 to 31 March 2018 |
8,000 × 3 = |
24,000 |
|
31 March 2018 to 31 March 2018 |
7,000 × 0 = |
0 |
|
|
Sum of Product |
3,06,000 |
Here the formula will be
Interest on Drawings = Product × `Rate/100` x `1/2`
= 3,06,000 × `9/100 xx 1/12`
= Rs 2,295
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