28. Ajay, Binod and Chandra entered into partnership on 1st April 2019 with a capital of 3,00,000. 200,000 and
'1,00,000 respectively. In addition to capital Chandra has advanced a loan of 1,00,000. Since they had no
agreement to guide them, they faced following issues during and at the end of the year.
1. Ajay wanted interest on capital to be provided @8% pa but Binod and Chandra did not agree.
2. Chandra wanted that interest on loan be paid to him @ 10% pa but Ajay and Binod wanted to pay @ 5%
pa.
3. Ajay and Binod demanded to share profits in the ratio of their capital contribution, Chandra is not in.
agreement with this proposal
LO
Answers
In the absence of Partnership deed, the provisions of partnership act 1932 will apply according to which no interest on capital is payable.
2. In the absence of partnership deed, the provisions of partnership act 1932 will apply according to which interest on loan by partner will be paid @6% pa.
3. In the absence of partnership deed, the provisions of partnership act 1932 will apply according to which profits will be shared equally.
4. In the absence of partnership deed, the provisions of partnership act 1932 will be applicable according to which no salary/remuneration is payable to any partner.
hope I'm able to solve ur query
Concept
Profit and loss appropriation account is an account which is made to record or to find the part of profits after interest on loan is divided between the partners but it is required that all the sharing is authorised by all partners.
Given
Capital of Ajay, Binod, Chandra is 3 lakhs, 2 lakhs, 1 lakhs.
Interest on loan is 10% p.a.
To find
1) Because the interest on capital of Ajay is not authorised by other members so we cannot give them.
2) We have to give interest on loan to Chandra equal to 10000. It is not authorsed but we have to give this.
3) The profit ratio is required authorisation from all partners. Only then profit and loss appropriation account is prepared.
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