Calculation of interest on drawing in partner ship accounting

There are four latest method apply , if any body withdraws any fund or cash for personal use from his firm .

1.If any partner withdraws every month in the first day the he will pay to firm @ given rate for 6.5 months
2.If any partner withdraws every month in the middle of month , he will pay interest on drawing @ given rate for 6 months
3.If any partner withdraws every month in the end of month , he will pay interest on drawing @ given rate for 5.5 months
4.If any partner does not withdraw every month then his withdrawing month usage product will be calculated
suppose if he withdraw Rs.5000 in first of march then he will calculate product of
5000X10 =50000
after calculating product he calculate his payable interest on drawing @ given rate
= amount of product X R/100 X 1/12

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Partner ship accounts problems

Suppose A and B are the partners . They do not have any partnership agreement . How will you solve the following disputes among them ?
a) A spent twice the time that B devoted to business .A claims that he should get a salary of Rs. 3000 per month for extra time spent Ans. No Salary will be given in the absence of any agreement .
b)B has provided a capital of Rs. 50000 where as A has provided only Rs. 10000 as capital . A however has provided Rs. 20000 as loan to firm . What interest if any will be given to A and B ?Ans. Only interest on loan @6% will be given
c) A wants to introduce his son Sunil into his business . B objects to it .
Ans. No new partner will be admitted
d) B wants that profit should be distributed in ratio of capital but A wants that it should be distributed equally
Ans.Profit should be shared equally in the absence of any agreement

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Partnership accounting basics

In the partnership accounting , all the final accounts are same as sole trade business final accounts . But main difference in these accounts are that In partner ship accounting , we make one extra account that is called profit and loss appropriation account which is used for calculating net share of profit or loss of different partner of a firm.



•This account is opened with credit balance of net profit ,


•In the debit side , we show interest on capital , salary and commission of partners and


•in credit side we shows interest on drawing , after adjusting these items , we transfer net profit to partners capital accounts in their profit sharing ratio


•In Absence of any partner ship deed Partner will divide profit or loss equally


•No interest on capital is given


•No interest on drawing is given


•No salary to any partner Interest on loan given by any partner is 6% annual.

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