10 June 2010
how is the interest calculated on partners current account ??? is it calculated on closing balance or as per Avg Due Date... pls give detailed solution and calculationssss.........
10 June 2010
Interest on Partner's Current account is generally provided as per the Partnership deed or on proportionate basis for the number of days on the balance amount. The sample claculation is given below.(Sorry for the presentation given because of the limitation of teh way to post here)
Interest @10%
Date Deposit / (Drawing) Balance Amount Interest Days of Interest 01.04.2010 Rs150,000 Rs 2506 61Days 01.06.2010 Drwawings Rs-10,000 Rs140,000 Rs4679 122Days 01.10.2010 Rs15000 Deposit Rs155,000 Rs3906 92 Days 01.01.2011 Rs-25000 Drwaings Rs130,000 Rs3205 90 Days
10 June 2010
The partnership deed, normally, contains a clause regarding payment of interest,the rate and method of calculating the same. If so, follow that method. If the appropriate information regarding the method of calculation of interest is not specifically mentioned in the instrument of partnership, it is a convention that the interest on current account is calculated on the outstanding daily balance.
CAclubindia
