a and b are partner in a partnership of firm without any agreement .A has withdrawn rs.50000 out of his capital as drawing interest on drawing may be changed from a by the firm
Answers
No interest will be charged on drawings.
Explanation:
When party A and party B or more people form a partnership they will usually make an agreement between them. in this agreement there are rules on what to do and what not to do and all the partners will have to follow these like in what ratio they will share their profit and losses of business at the end of the year, if salary will be given to any partner or outsider for their work, or at what rate interest on capitals will be given to all partners, or at what rate interest on drawings will be charged on the drawings made by the partners or at what rate interest on loan will be given. but if the partners don't have an agreement like that then all profits and losses will be divided equally between them, no partner will get any interest on their capital and no interest on drawings will be charged, but interest on loan will be given at @ 6 %.
in this case, A and B don't have an agreement, and A withdrew rs.50,000 from his capital as drawings. but since there is no partnership agreement then no interest on drawings will be charged by the firm.