Question

Indu and Surekha are partners sharing profits and losses in the ratio of 2 : 1 with Capitals of ₹ 3,00,000 and ₹ 2,00,000.

You are required to answer the following question in the alternative case:

If the partnership deed is silent as to interest on Capital and the profits for the year are ₹ 60,000, then Surekha's share of interest on Capital will be ______.

Options

• ₹ 18,000

• Nil

• ₹ 27,000

• ₹ 12,000

Answer 1

If the partnership deed is silent as to interest on Capital and the profits for the year are ₹ 60,000, then Surekha's share of interest on Capital will be nil.

Explanation:

If interest on capital is not stated in the firm's partnership deed, interest on capital is not allowed.