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Showing posts from June, 2006

Menon and Thomas are Partners in a Firm. They Share Profits Equally - Bzziii.com

Menon and Thomas are partners in a firm. They share profits equally. Their monthly drawings are Rs 2,000 each. Interest on drawings is to be charged @ 10% p.a. Calculate interest on Menon’s drawings for the year 2006, assuming that money is withdrawn: (i) in the beginning of every month, (ii) in the middle of every month, and (iii) at the end of every month. SOLUTION Calculation of interest on Menon’s drawings for the year 2006 Cash (I) Menon withdrawn money in the beginning of every month = Total Drawings `\times` Rate `\times` `frac{13}{2\times12}` = Rs. 24,000 `\times` `10/100` `\times` `frac{13}{2\times12}` = Rs. 1,300. Cash (II) Menon withdrawn money in the middle of every month = Rs. 24,000 `\times` `10/100` `\times` `frac{6}{12}` = Rs. 1,200. Cash (III) Menon withdrawn money in the end of every month = Total Drawings `\times` Rate `\times` `frac{11}{2\times12}` = Rs. 24,000 `\times` `10/100` `\times` `frac{11}{2\times12}` = Rs 1,100 Chapter-2 Partnership Basic: Accounts