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Question -

Aakriti and Bindu entered into partnership for making garment on April 01, 2016 without any Partnership agreement. They introduced Capitals of ₹ 5, 00,000 and ₹ 3, 00,000 respectively on October 01, 2016. Aakriti Advanced. ₹ 20,000 by way of loan to the firm without any agreement as to interest. Profit and Loss account for the year ended March 2017 showed profit of ₹ 43,000. Partners could not agree upon the question of interest and the basis of division of profit. You are required to divide the profits between them giving reason for your solution.



Answer -

Profit and Loss Adjustment Account

Dr.

 

 

 

 

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Interest on Partner’s Loan

 

 

Profit and Loss

 

43,000

Aakriti 20,000 × (6/100) × (6/12)

600

 

 

 

Profit transferred to

 

 

 

 

 

Aakriti’s Capital

21,200

 

 

 

 

Bindu’s Capital

21,200

42,400

 

 

 

 

 

43,000

 

43,000

 

 

 

 

 

 

 

 

 

 

 

 
Reason
a) Interest on partner’s loan shall be allowed at 6% p.a. because there is no partnership agreement.
b) Interest on capital shall not be allowed because there is no agreement on interest on capital.
c) Profit shall be distributed equally because profit sharing ratio has not been given.

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