A,B and C were partners with capitals of rs.50,000;rs.40,000and rs.30,000 respectively carrying on business in partnership.The firm's reported profit for the year was rs.80,000.As per provision 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.
Hi Ankita,
As per the provisions of the Indian Partnership Act of 1932, interest @ 6% p.a. is provided to the partners for any amount advanced by them to the firm by way of loan. Here, A will be entitled to receive interest of Rs 1,200 (20,000 @ 6%). Thereafter, the remaining profits (80,0001,200) will be shared equally among A, B and C.
So, A will get Rs 27,466 (his share of profit + interest on loan i.e. Rs 26,266 + 1,200)
B & C will get Rs 26267 each.
As per the provisions of the Indian Partnership Act of 1932, interest @ 6% p.a. is provided to the partners for any amount advanced by them to the firm by way of loan. Here, A will be entitled to receive interest of Rs 1,200 (20,000 @ 6%). Thereafter, the remaining profits (80,0001,200) will be shared equally among A, B and C.
So, A will get Rs 27,466 (his share of profit + interest on loan i.e. Rs 26,266 + 1,200)
B & C will get Rs 26267 each.