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Question
When Partnership Deed is silent, Partners share profits of the firm according to capital ratio.
Options
Agree
Disagree
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Solution
I disagree with the given statement.
Explanation:
When the partnership deed is silent, the Indian Partnership Act, 1932 (Section 13(b)) states that partners share profits (and losses) equally, not in the ratio of their capitals. If the deed specifies a capital ratio, profits are shared accordingly. But if it is silent, the law assumes all partners contribute equally in terms of effort and responsibility, so the division is equal, regardless of the amount of capital invested.
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Rudra, Dev and Shiv were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Their fixed capitals were ₹ 6,00,000, ₹ 4,00,000 and ₹ 2,00,000 respectively. Besides his capital Shiv had given a loan of ₹ 75,000 to the firm. Their partnership deed provided for the following:
During the year Rudra withdrew ₹ 50,000 at the end of each quarter; Dev withdrew ₹ 50,000 in the beginning of each half year and Shiv withdrew ₹ 70,000 at the end of each half year. The profit of the firm for the year ended 31-3-2022 before allowing interest on Shiv's loan was ₹ 7,06,750. |
How much amount of net profit will be transferred to Profit and Loss Appropriation A/c?
Richa and Anmol are partners sharing profits in the ratio of 3:2 with capitals of ₹ 2,50,000 and ₹ 1,50,000 respectively. Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an annual salary of 12,500. During the year ended 31st March 2023, the profits of the year prior to calculation of interest on capital but after charging Anmol’s salary amounted to ₹ 62,000. A provision of 5% of this profit is to be made in respect of manager’s commission.
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| To Interest on Capital | By Profit & loss account (After manager’s commission) | -(2)- | |
| Richa | ______ | ||
| Anmol | ______ | ||
| To Anmol’s Salary a/c | 12,500 | ||
| To Profit transferred to: Richa’s Capital A/C (1) | -(1)- | ||
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Richa and Anmol are partners sharing profits in the ratio of 3:2 with capitals of ₹ 2,50,000 and ₹ 1,50,000 respectively. Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an annual salary of 12,500. During the year ended 31st March 2023, the profits of the year prior to calculation of interest on capital but after charging Anmol’s salary amounted to ₹ 62,000. A provision of 5% of this profit is to be made in respect of manager’s commission.
Following is their Profit & Loss Appropriation Account
| Particulars | (₹) | Particulars | (₹) |
| To Interest on Capital | By Profit & loss account (After manager’s commission) | -(2)- | |
| Richa | ______ | ||
| Anmol | ______ | ||
| To Anmol’s Salary a/c | 12,500 | ||
| To Profit transferred to: Richa’s Capital A/C (1) | -(1)- | ||
| Anmol’s Capital A/c | ______ | ||
| ______ | ______ |
The amount to be reflected in blank (2) will be:
