Question

Shrikant and Ajay were partners in a firm sharing profits and losses in the ratio of \( 5 : 3 \). Shrikant withdrew ₹ 10,000 in the beginning of each quarter during the year ended 31st March, 2023. Interest on Shrikant’s drawings @ 6\% p.a for the year ended 31st March, 2023 will be:

• A. ₹ 2,400
• B. ₹ 1,200
• C. ₹ 1,500
• D. ₹ 900

Hint:

For quarterly withdrawals at the beginning, use the average time of \( \frac{5}{8} \) years to calculate the interest.

Answer 1

The Correct Option is C

1. Details of Withdrawals: Shrikant withdrew ₹ 10,000 at the beginning of each quarter. Total quarterly withdrawals = 4 quarters × ₹ 10,000 = ₹ 40,000. 2. Interest on Drawings Formula: \[ \text{Interest on Drawings} = \text{Total Withdrawals} \times \text{Rate of Interest} \times \text{Average Time}. \] 3. Average Time for Quarterly Withdrawals: When withdrawals are made at the beginning of each quarter, the average time is calculated as: \[ \text{Average Time} = \frac{12 + 9 + 6 + 3}{4 \times 12} = \frac{30}{48} = \frac{5}{8}. \] 4. Calculation of Interest: \[ \text{Interest on Drawings} = ₹ 40,000 \times \frac{6}{100} \times \frac{5}{8}. \] Simplifying: \[ \text{Interest on Drawings} = ₹ 40,000 \times 0.06 \times 0.625 = ₹ 1,500. \]