Login

For calculation of interest on drawings..if the duration is not specifed

rn

how do i know when to take 6/12? and when i should not..? its smt related to p.a. right

 yes if in the question it is given that drawings 2000 per annum we have to take 6/12

if it is not specified about per annum we dont have to include 6/12

  • 1
View Full Answer

Thanks for pointing out the error. The error as pointed by you has been rectified and will be uploaded soon.

As in the question, the condition of per annum is attached with the rate of interest so, the interest on drawings is calculated on an average basis for the period of 6 months. In this case, the interest on drawings that is to be calculated as:



These interest on drawings are credited to the Profit and Loss Appropriation Account and debited to the Partners' Capital Account. Accordingly, the closing capital balances of Dinker and Ravinder will be Rs 2,47,627 and Rs 1,71,573.

  • 0

Alright :) Thanks.

  • 1

Why interest on drawings charged on dr. Side of partner's capital account when we make accounts through fluctuating capital method.

  • 1

when equal amount is withdrawn in the beginning of each quarter, how do we get interest of drawings as 7.5 months as an average period

  • 0
What are you looking for?