A, B and C were capitals of Rs. 50,000; Rs. 40,000 and Rs. 30,000 respectively carrying on business in partnership. The firm's reported profit for the year was Rs. 79,200. As per provisions of the Indian Partnership Act, 1932, find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of Rs. 20,000, in addition to his capital contribution?

Rs. 26,000 for the partner B and C & Rs. 27,200 for partner A.

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Rs. 26,400 each partner

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Rs. 33,000 for A, Rs. 26,400 and Rs. 19,800 for C.

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None of these

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Solution

The correct option is A Rs. 26,000 for the partner B and C & Rs. 27,200 for partner A.
Profit after charging interest = Profit before charging interest - Interest on loan
= RS-79,200 - 1,200
= RS-78,000.
Profit distribution among partners = RS-78,000/3
= RS-26,000.
Profit for B and C = RS-26,000
Profit for A = RS-26,000 + RS-1,200
= RS-27,200.

Note:-.
1) When there is no mention about the profit sharing ratio among partners its assumed to be equal.
2) If there is no agreement or no provision regarding interest on loan in the agreement then the interest will be charged @ 6% p.a.

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Similar questions

A, B and C have capitals of Rs. 50,000, Rs. 40,000 and Rs. 30,000 respectively who were carrying on a business in partnership. The firm reported profit for the year was Rs. 79,200. Find out the share of each partner in the above amount after taking into account that no interest has been provided on advance given by A of Rs. 20,000, in addition to his capital contribution.

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Q. A, B and C were partners in a firm having capitals of Rs. 50,000; Rs. 50,000 and Rs.1,00,000 respectively. Their Current Account balances were. A: Rs. 10,000; B: Rs. 5,000 and C: Rs. 2,000 (Dr.). According to the Partnership Deed the partners were entitled to an interest on Capital @ 10% p.a. C being the working partner was also entitled to a salary of Rs.12,000 p.a. The profits were to be divided as:
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