Question

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

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

Hint:

N/A

Answer 1

The Correct Option is C

Interest on drawings is calculated as: \[ \text{Interest on Drawings} = \text{Total Drawings} \times \text{Rate of Interest} \times \text{Average Period}. \] 1. Total Drawings = ₹ 10,000 \times 4 = ₹ 40,000. 2. Average Period = \(\frac{15}{12}\) years (as withdrawals are made at the beginning of each quarter). 3. Interest on Drawings: \[ \text{Interest} = ₹ 40,000 \times \frac{6}{100} \times \frac{15}{12} = ₹ 1,500. \]