Ram and Rahim start business with capital of Rs. 50,000 and Rs. 30,000 on 1st January, 2005. Rahim is entitled to a salary of Rs. 400 per month. Interest is allowed on capitals and is charged on drawings at 6% per annum. Profits are to be distributed equally after the above noted adjustments. During the year Ram withdrew Rs. 8,000 and Rahim withdrew Rs. 10,000. The profit for the year before allowing for the terms of the Partnership Deed came to Rs. 30,000. Assuming the capitals to be fixed, prepare the Capital and Current Accounts of the partners.
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In this problem why should we divide interest on drawings amount by 2 ? It is done so in ICAI material, please let me know the reason.
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