Question

A and B are partners from 1st April, 2017, without a Partnership Deed and they introduced capitals of ₹ 35,000 and ₹ 20,000 respectively. On 1st October, 2017, A advances a loan of ₹ 8,000 to the firm without any agreement as to interest. The profit and Loss Account for the year ended 31st March, 2018 shows a profit of ₹ 15,000 but the partners cannot agree on payment of interest and on the basis of division of profits.
You are required to divide the profits between them giving reasons for your method.

Answer 1

Distribution of profits is given below.

Explanation:

According to Partnership Act, 1932 profits should be divided equally among the partners, in case nothing has been mentioned in their agreement.

Calculation of profits:-

Interest on loan= 6% per annum

Amount of loan given by partner A = Rs,8000

Time period for which the loan has been provided (from 1st October 2017 to 31st March 2018) = 6 months

Interest on A’s loan:

                $= 8000 \times \frac {6}{100} \times \frac{6}{12} = 240$

Thus, the interest amount will be Rs. 240

Equal profits of share will be:

Total Profit obtained without deducting the interest amount = Rs 15,000,

So, the actual profit will be $15,000-240 = 14,760$

This amount will be divided equally as $\frac{14,760}{2}= Rs. 7,380$

So, A and B will get a profit of Rs. 7380.

Answer 2

Answer:

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Explanation:

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