Question

In the absence of partnership deed interest allowed on partner's capital

Answer 1

Explanation:

Interest on capital : No interest on capital would be allowed to partners. If there is an agreement to allow interest on capital it is to be allowed only in case of profits.

Answer 2

Here,

Before P's salary, firm's profit = Rs. 5,70,000.

Salary of P = Rs. 70,000.

Thus,

✠ Profit after P's salary = Profit before P's salary - Salary of P

➨ Profit after P's salary = Rs. 5,70,000 - Rs. 70,000

➨ Profit after P's salary = Rs. 5,00,000

So,

✠ Distributable Profit = Profit after P's salary

➨ Distributable Profit = 5,00,000

Now,

✠ This profit will be distributed among P, Q and R in the ratio 5 : 3 : 2.

➨ Share of Profit of P = 5/10 = ½

So,

★ Amount of Profit received by P = ½ of Rs. 5,00,000

➨ Amount of Profit received by P = ½ × Rs. 5,00,000

➨ Amount of Profit received by P = Rs. 2,50,000

Again,

Salary of P = Rs. 70,000

Hence,

✪ Total Amount received by P from the firm = Amount of Profit received by P + Salary of P

⇒ Total Amount received by P from the firm = Rs. 2,50,000 + Rs. 70,000

∴ Total Amount received by P from the firm = Rs. 3,20,000