Question

Ananya and Mukti are partners in a firm. On 1st April, 2023 their fixed Capitals were ₹ 6,00,000 and ₹ 4,00,000 respectively. On Ist January, 2024, Ananya granted a loan of ₹ 2,00,000 to the firm. Mukti had allowed the firm to use her property for business for a monthly rent of ₹ 15,000. The partnership deed provides that interest on capital will be allowed @ 8% p.a. and Mukti is to be allowed a salary of ₹ 10,000 per month. The firm earned a profit of ₹ 63,000 for the year ended 31st March 2024 before any of the above adjustment is made.

Based on the above information you are required to answer the following question:

Which of the following is charge against profit?

Options

• Rent Payable to Mukti

• Interest on Ananya's Loan

• Salary Payable to Mukti

• Interest on Capital

Answer 1

Rent Payable to Mukti and Interest on Ananya's Loan

Explanation:

Rent and interest on the partner's loan are charges against profit (debited to the P&L Account). Interest on Ananya's Loan is also a charge against profit.