Out of the following statements, which are correct?
(A) In the absence of partnership deed, no partner is entitled to get salary or other remuneration.
(B) If a partner withdraws fixed amount at the end of each month for the whole year, then interest on drawings will be calculated for an average period of 5.5 months.
(C) If the partnership deed provides for interest on capital but the firm does not have sufficient profit, then the interest on capital will be paid to the extent of availble profit in the ratio of interest on capital.
(D) If a partner is admitted into a firm with a guarantee of certain profit, then the deficiency of profit (if any) shall be borne by the old partners in their capital ratio.
Out of the following statements, which are correct?
(A) In the absence of partnership deed, no partner is entitled to get salary or other remuneration.
(B) If a partner withdraws fixed amount at the end of each month for the whole year, then interest on drawings will be calculated for an average period of 5.5 months.
(C) If the partnership deed provides for interest on capital but the firm does not have sufficient profit, then the interest on capital will be paid to the extent of availble profit in the ratio of interest on capital.
(D) If a partner is admitted into a firm with a guarantee of certain profit, then the deficiency of profit (if any) shall be borne by the old partners in their capital ratio.
Solution
Without a deed no remuneration is allowed, so (A) is correct. For equal monthly drawings at the end of each month the average period is months, so (B) is correct. When profit is inadequate, interest on capital is an appropriation limited to available profit and distributed in the ratio of interest amounts, so (C) is correct. Deficiency under a guarantee is borne in the profit sharing ratio, not the capital ratio, so (D) fails.
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