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 loan were Rs. 12,000 and Y determined interest @ 24% p.a. on his loan of Rs.1,60,000. There was no agreement on this point. Calculate the amount payable to X, Y and Z respectively.

• A. Rs. 4,000 to each partner.
• B. Loss of Rs. 8,800 for X and Z & Y will take home Rs. 25,600.
• C. Rs. 800 for X, Rs. 10,400 for Y and Rs. 800 for Z.
• D. Rs. 4,800 to each partner.

Answer 1

The correct option is C Rs. 800 for X, Rs. 10,400 for Y and Rs. 800 for Z.

When there is no agreement or deed among the partners interest on loan is to be provided @ 6%. Hence, interest will be RS-1,60,000 x 6/100 = RS-9,600.

Profit left for distribution = Profit before interest - Interest

= 12,000 - 9,600

= RS-2,400.

Partner's share = 2,400/3

= RS-800.

Amount payable to X = RS-800.

Amount payable to Y = RS-9,600 + RS-800

= RS-10,400.

Amount payable to Z = RS-800.