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Question
Ram and Shyam were partners. Ram withdrew ₹ 18,000 at the beginning of each half year. Interest on drawings is chargeable @ 10% p.a. Calculate interest on the drawings for the year ending 31st December 2018 using the average period.
Solution
Total amount of drawing: 18,000 × 2 = 36,000
Interest on drawings = Amount × Rate of Interest × `"Average period"/12`
= `36,000 xx 10/100 xx 9/12`
= ₹ 2,700
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