Question

A and B are partners sharing the profits and losses in the ratio of 2:3 with capitals of 40,000 and 20,000 respectively. On 1st July, 2019, A and B granted loans of 80,000 and 40,000 respectively to the firm. Show the distribution of profits/losses if the profits before charging any interest for the year 2019 amounted to ₹ 8,400.​

Answer 1

Explanation:

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>>Reconstitution of a Partnership Firm - Admission of a Partner

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>>A and B are partners sharing profits and

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A and B are partners sharing profits and losses in ratio of 2:3 with capitals of Rs.2,00,000 and Rs.1,00,000 respectively. On 1st October, 2017, A and B granted loans of Rs.4,00,000 and Rs.2,00,000 respectively to the film. The Partnership Deed is silent as to the interest on

Partner's Loan. Determine the amount of profit/loss for the year ended 31st March, 2018 in each of the following cases to be distributed among partners:

Case 1: If the Profit before interest for the year amounted to Rs.25,000.

Case 2: If the Profit before interest for the year amounted to Rs.15,000.

Case 3: If the Loss before interest for the year amounted to Rs.25,000.

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When the Partnership Deed is silent as to Interest on Partner's Loan, as per the Indian Partnership Act, 1932, interest @ 6% p.a. is allowed on loan by a partner.

Case 1: Distributable Profit/Loss = Profit before Interest − Interest on Partners' Loan

=Rs.25,000−Rs.18,000=Rs.7,000.

*Interest on A's Loan (Rs.4,00,000×

100

6

×

12

6

) Rs.12,000

Interest on B's Loan (Rs.2,00,000×

100

6

×

12

6

)

Rs.6,000

Total

Rs.18,000

Case 2: Distributable Profit/Loss = Profit before Interest − Interest on Partners' Loan

=Rs.15,000−Rs.18,000=Rs.3,000 (Loss).

Case 3: Distributable Profit/Loss = Loss before Interest + Interset on Paetner's Loan

=Rs.25,000+Rs.18,000=Rs.43,000 (Loss)

Answer 2

shate profit A-1920 B-2880