Question

A and B were in partnership. They do not have any partnership deed. A presented the following Profit and

Loss Appropriation Account. Should B accept it. Otherwise redraw it: (4)

PROFIT AND LOSS APPROPRIATION ACCOUNT

To interest on Capital @ 10% p.a.

A on Rs. 2,00,000 20,000

B on Rs. 1,00,000 10,000

To salary to A

To interest on Loan to A @ 15%

To profit:

A 2/3 44,000

B 1/3 22,000

Rs

30,000

12,000

3,000



66,000

________

1,11,000

By profit for the year

By interest on Drawings

@ 10 % p.a.

A on Rs. 15,000 1,500

B on Rs. 12,000 1,200

Rs.

1,08,300

2,700

________

1,11,000​

Answer 1

Answer:

B should not accept it.

Explanation:

If written partnership deed is not there.

Then,

1. Int. on capital is not allowed

2. Int. on drawing is not charged

3. Salary to any of the partner is not allowed

4. Profit is equally distributed among all partners.