A and B are partners sharing profits equally. A drew regularly Rs. 4,000 at the end of every month for six months ended 30th September, 2019. Calculate interest on drawings @ 5% p.a. for a period of six months.

Solution

Average month = time lift after first drawing + time lift after last drawing ÷2
= 5+0÷2 = 2.5

Interest on drawing= total drawing×Rate of drawing/100×Average month / 12
=24,000×5/100×2.5/12 = 250