Question

X, Y, and Z are partners in a firm. At the time of division of profit for the year, there was a dispute between the partners. Profits before interest on partner's capital was 24,000 and Z demanded minimum profit of 10,000 as his financial position was not good. However, there was no written agreement on this profit. Show how profit will be distributed amongst the partners.

• A. Rs 8,000 to each of the partners
• B. X & Y will take 7,000 each and Z will take 10,000
• C. Other partners will pay Z the minimum profit and will suffer loss in capital ratio
• D. Other partner will pay Z the minimum profit and will suffer loss equally

Answer 1

The correct option is A

Rs 8,000 to each of the partners

Share of profit = 12,000/3= Rs 4,000
(i.e. distributed equally in the absence of written agreement)