Comprehension:A partner withdrew money during the financial year ending March 31, 2020 from his capital accoun

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Comprehension:A partner withdrew money during the financial year ending March 31, 2020 from his capital account for personal use.The individual amounts withdrawn were:Rs. 12,000 on June 01, 2019Rs. 8,000 on August 31, 2019Rs. 3,000 on September 30, 2019Rs. 7,000 on November 30, 2019Rs. 6,000 on Janu

Accepted Answer

We can compute total interest using the Product Method:Date of DrawingAmount (Rs.)Period up to Mar 31, 2020 (Months)Product (Amount × Period)June 01, 2019

12, 000

10

1, 20, 000

Aug 31, 2019

8, 000

7

56, 000

Sept 30, 2019

3, 000

6

18, 000

Nov 30, 2019

7, 000

4

28, 000

Jan 31, 2020

6, 000

2

12, 000

Total

\sum Product = 2, 34, 000

Using the Product Method formula:

Total Interest = Total Product \times Rate \times \frac{1}{12}

Total Interest = 2, 34, 000 \times \frac{9}{100} \times \frac{1}{12} = 2, 340 \times \frac{9}{12} = 2, 340 \times \frac{3}{4} = 585 \times 3 = Rs. 1, 755

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