Sun, Moon and Star are partners who make up their accounts to 31 December each year. Their
Question:
Sun, Moon and Star are partners who make up their accounts to 31 December each year. Their agreement provides that interest is chargeable on their drawings at 6% per annum.
■ Scenario 1: Sun draws £5,000 on 31.3.2012, Moon draws £8,000 on 1.7.2012 and Star draws £20,000 on 1.8.2012 and £6,000 more on 1.10.2012.
■ Scenario 2: Sun, Moon and Star each draw £2,000 per month regularly, Sun drawing on the first day of each month, Moon drawing on the last day and Star in the middle of each month.
■ Scenario 3: Sun drew £4,000 per month on the first day of each month, up to and including 1 September 2012. Moon drew £5,000 per month, on the last day of each month, but commencing on 31.3.2012. Star drew regularly throughout the year in the middle of each month, but the amount drawn was £2,000 per month until 15.6.2012 and £3,000 per month thereafter.
Required:
Determine the amount of interest to be charged in respect of each partner’s drawings in each of the above alternative scenarios.
Step by Step Answer:
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict