Question

Arora and Gurmeet were partners in a firm sharing profits and losses in the ratio of 3 : 2. Starting from 1st October, 2024 Arora withdrew ₹ 30,000 at the beginning of each quarter for his personal use. Interest on drawings was to be charged @ 12% per annum. Interest on Arora's drawings for the year ended 31st March, 2025 was:

• A. ₹ 1,800
• B. ₹ 2,700
• C. ₹ 450
• D. ₹ 3,600

Hint:

For drawings at the \textbf{beginning} of each quarter:

• If number of quarters = n, then periods are: n, n-1, ..., 1 months
• Average period = \(\frac{n + 1}{2}\) months? Actually for beginning of quarter, average period = \(\frac{\text{First period} + \text{Last period}}{2}\)

For 2 quarters: 6 and 3 months \(\Rightarrow\) Average = 4.5 months.

Answer 1

The Correct Option is B

We need to calculate interest on Arora's drawings when fixed amounts are withdrawn at the beginning of each quarter.
Step 1: Understand the drawings pattern.

• Amount withdrawn each quarter = ₹ 30,000
• Withdrawn at the beginning of each quarter
• Starting from 1st October, 2024
• Year ended 31st March, 2025

So the quarters and dates are:

• Quarter 1: 1st October, 2024 (beginning of Oct-Dec quarter)
• Quarter 2: 1st January, 2025 (beginning of Jan-Mar quarter)

Step 2: Determine the period for which each withdrawal remains outstanding.
Interest is charged for the period from the date of withdrawal to the end of the accounting year (31st March, 2025).

• Withdrawal on 1st Oct, 2024: Period = 6 months (Oct to Mar)
• Withdrawal on 1st Jan, 2025: Period = 3 months (Jan to Mar)

Step 3: Calculate interest using product method.
\[ \text{Interest} = \text{Total of Products} \times \frac{\text{Rate}}{100} \times \frac{1}{12} \] Alternatively, calculate interest for each withdrawal: For ₹ 30,000 for 6 months: \[ \text{Interest} = 30,000 \times \frac{12}{100} \times \frac{6}{12} = 30,000 \times 0.12 \times 0.5 = ₹ 1,800 \] For ₹ 30,000 for 3 months: \[ \text{Interest} = 30,000 \times \frac{12}{100} \times \frac{3}{12} = 30,000 \times 0.12 \times 0.25 = ₹ 900 \] Step 4: Total interest.
\[ \text{Total Interest} = 1,800 + 900 = ₹ 2,700 \] Step 5: Alternative method using average period.
For drawings at the beginning of each quarter, the average period = \(\frac{6 + 3}{2} = 4.5\) months? Actually, for 2 quarters, the formula is: Average period = \(\frac{\text{Total months for all drawings}}{\text{Number of drawings}}\) = \(\frac{6 + 3}{2} = 4.5\) months Total drawings = ₹ 60,000 \[ \text{Interest} = 60,000 \times \frac{12}{100} \times \frac{4.5}{12} = 60,000 \times 0.12 \times 0.375 = ₹ 2,700 \] Final Answer: (B) ₹ 2,700