SimonMash.com | Kerala Plus One & Plus Two Study Notes, Question Papers, Answer Keys, Resources

Note: Interest on drawings is charged only if the partnership deed provides for it. 1. Simple Method (Exact Dates) Formula: Amount × Rate × (Period / 12) Example: Partner A withdrew ₹10,000 on 1 July. Rate = 10% p.a. Year ends 31 December. Period = 6 months (July to December). Interest = ₹10,000 × 10% × 6/12 = ₹500 2. Product Method (Multiple Drawings with Different Dates) Formula: [Sum of (Amount × Months to year‑end)] × Rate / 12 Example: Partner B withdrew: ₹5,000 on 1 May (months to year‑end: 8) ₹8,000 on 1 August (months: 5) ₹4,000 on 1 November (months: 2) Rate = 10% p.a. Year ends 31 December. Products: ₹5,000 × 8 = 40,000 ₹8,000 × 5 = 40,000 ₹4,000 × 2 = 8,000 Total Product = 88,000 Interest = (88,000 × 10/100) / 12 = 8,800 / 12 = ₹733.33 3. Average Period Method (Fixed Amounts at Regular Intervals) Formula: Total Drawings × Rate × (Average Peri...

When are Drawings Ignored or Considered? Scenario Drawings Ignored? Only opening capital given ✅ Ignored Opening + additional capital (with date) ✅ Ignored Drawings given BUT no dates ✅ Ignored (can't calculate otherwise) Drawings given WITH DATES ❌ Considered (use product method) Methods 1. Only Opening Capital Given Partner A: Opening Capital ₹1,00,000, Interest 10% p.a. Interest = ₹1,00,000 × 10% = ₹10,000 2. With Additional Capital Only (No Drawings) Partner B: Opening ₹80,000, Additional ₹20,000 on 1 July, Interest 10%, Year end 31 Dec. Interest = (₹80,000 × 10%) + (₹20,000 × 10% × 6/12) = ₹8,000 + ₹1,000 = ₹9,000 3. With Drawings Only (Drawings Ignored – Simple Method, No Dates) Partner C: Opening ...