Harshad and Dhiman are in partnership since April 01, 2016. No Partnership agreement was made. They contributed Rs 4,00,000 and 1,00,000 respectively as capital. In addition, Harshad advanced an amount of Rs 1,00,000 to the firm, on October 01, 2016. Due to long illness, Harshad could not participate in business activities from August 1, to September 30, 2017. The profits for the year ended March 31, 2017 amounted to Rs 1,80,000. Dispute has arisen between Harshad and Dhiman. Harshad Claims: (i) He should be given interest @ 10% per annum on capital and loan; (ii) Profit should be distributed in proportion of capital; Dhiman Claims: (i) Profits should be distributed equally; (ii) He should be allowed Rs 2,000 p.m. as remuneration for the period he managed the business, in the absence of Harshad; (iii) Interest on Capital and loan should be allowed @ 6% p.a. You are required to settle the dispute between Harshad and Dhiman. Also prepare Profit and Loss Appropriation Account.
Answers
Answer:
Mr. Manishis the General Manager of a transport
company drawing a basic salary of Rs. 15,000 per
month. He is also receiving D.A. (60% forming part
of salary) Rs. 10,000 per month and entertainment
allowance of Rs.1,500 per month. He is provided
by the company with a car having engine cubic
capacity of 1.8 litres for is personal and official
use, but running and maintenance expenses for the
same are borne by the assessee himself. He is in
receipt of bonus equivalent to 2 month's basic salary.
He also owns two house properties in Meerut,
the details of which are given below:
House 1 House 2
Nature
Self occupied Let out
Municipal value (Rs.) 45,000 65,000
Annual rent (Rs.)
Nil 78,000
Municipal tax paid (Rs.) 3,000 6,000
Interest on taken for
construction of house (Rs.) 12,500 21,300
During the previous year he contributed Rs.
36,000 to Recognised Provided Fund, Rs. 25,000
as Life Insurance premium and Rs. 4,000 as medi-
claim insurance premium.
Compute the total income of Mr. Manish.