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 provides for interest on Capital @ 9% p.a. and the loss for the year is 15,000, then Indu's share of interest on Capital will be ______.

Options

• ₹ 27,000

• ₹ 9,000

• ₹ 10,000

• Nil

Answer 1

If the partnership deed provides for interest on Capital @ 9% p.a. and the loss for the year is 15,000, then Indu's share of interest on Capital will be nil.

Explanation:

If the company experiences a loss, interest on capital is not allowed.