Partnership

Accounting

Medium

common

Amitabh and Babul are partners sharing profits in the ratio of 3:2, with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. Amitabh has also given a Loan on April 01, 2024 of Rs. 50,000 to the firm without any agreement.

Calculate Interest on Amitabh's Loan assuming books are closing on 31st March, 2025.

Nil

Rs. 6,000

Rs. 1,500

Rs. 3,000

✅ Correct Option: 4

When a partner advances a loan to the firm without any agreement regarding interest, as per Section 13(d) of the Indian Partnership Act, 1932, the partner is entitled to interest at the rate of 6% per annum.

Calculation of Interest on Amitabh's Loan:

Loan Amount = Rs. 50,000

Rate of Interest = 6% p.a. (as per Partnership Act)

Period = April 01, 2024 to March 31, 2025 = 12 months (1 year)

Using the formula: Interest = $\frac{Principal \times Rate \times Time}{100}$

Interest = $\frac{50,000 \times 6 \times 1}{100}$ = Rs. 3,000

The interest on capital mentioned in the question (@ 6% p.a.) is relevant only for calculating interest on partners' capital accounts, not for the loan. The loan is a separate liability of the firm to the partner and attracts interest as per the Partnership Act since no specific rate was agreed upon.

Correct Option: 4 (Rs. 3,000)

2025: 4 June Shift 2

Choose the correct statement if a partnership deed is not present.

2025: 30 May Shift 2

Which of the following is not a features of partnership:

2025: 27 May Shift 1

If the partnership deed is silent on interest on capital, then:

2025: 22 May Shift 1

Ram and Laxman started business on 1st Jan 2020 with a capital of Rs 1,20,000 and Rs 80,000 respectively. Ram introduced Rs. 50,000 to the firm on 1st July 2020 as additional capital. If the rate of interest is 15% p.a. Assuming that accounts are closed as per calender year then the Interest payable to Ram on Capital would be:

2026: 12 May Shift 1

The Partnership deed should be properly drafted and prepared as per the provisions of _____.

2025: 30 May Shift 1

The following are the features of the fluctuating capital method by which the capital accounts of partners can be maintained.

(A) Under the fluctuating capital method, only one account, i.e. capital account is maintained for each partner.

(B) All the adjustments such as share of profit and loss, interest on capital, drawings, interest on drawings, etc. are recorded directly in the capital accounts of the partners.

(C) the capital of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn as per the agreement between the partners.

(D) The capital account may sometimes show a debit balance.

Choose the correct answer from the options given below:

Solution

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