Question

P and Q are partners from 1st January, 1998 without any partnership agreement and they introduced
capital of Rs. 40,000 and Rs 20,000 respectively. On 1st July, 1998, P advances Rs. 10,000 by way of loan to
the firm without any agreement as to interest. The Profit & Loss Account for the year 1998 disclosed a
profit of Rs 14,250, but the partners cannot agree upon the question of interest and upon the basis of
division of profits. You are required to divide the profit between them giving reasons for your method.​

Answer 1

Answer:

Check the photo below for the Profit and Loss Appropriation A/c

Working Notes :

1.  In the absence of any agreement between the partners, profit and loss will be divided

equally.

2.  If any partner gives loan to the firm then he is entitled interest on that loan @ 6% p.a.

in case there is no agreement between the partners.

3.  No interest on capital will be give, to any partner as there is no agreement between

the partners.

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