Since the time period of withdrawal is not mentioned in the question, the standard assumption is that drawings were made evenly throughout the year. In such cases, interest is calculated for an average period of 6 months.
Formula: Interest on Drawings = Drawings × Rate of Interest × 126
Calculating the interest:
Interest on Drawings = ₹1,00,000 × 10012 × 126
Interest on Drawings = ₹1,00,000 × 0.12 × 0.5
Interest on Drawings = ₹6,000
The factor 126 (or 0.5) represents the average time period. This is because when drawings are made uniformly throughout the year, on average, the money remains with the partner for 6 months. Therefore, interest is charged only for half the year, making the effective interest rate 6% (which is half of 12% p.a.).