Question 04 Chapter 2 of +2 Part-1 - USHA Publication 12 Class Part - 1

Question 04 Chapter 2 of +2-Part-1

4. (Absence of Partnership deed) A presents the following profit and loss appropriation account to his partner B:

Profit and Loss Appropriation Account A/c

Particulars		Amount	Particulars	Amount
To Interest on capital			By Profit for the year	1,00,400
A	9,600
B	4,800	14,400
To A’ s Salary		4,800
To Interest on B’s Loan		7,200
To Net profit transferred to Capital a/cs
-A (4/7)	17,600
-B (3/7)	13,200	30,800
		1,00,400		1,00,400

There is no partnership deed. B feels that he has not been treated fairly. Point out whether A has contravened the provisions of law and draw out new profit and loss appropriation account as per provisions of Indian Partnership Act.

The solution of Question 04 Chapter 2 of +2 Part-1 : - 

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Profit and Loss Appropriation Account A/c

Particulars		Amount	Particulars		Amount
To Interest on B’s Loan @6% p.a.		7,200	By Profit for the year		1,00,400
To Net profit transferred to Capital a/cs
-A (1/2)	46,600
-B (1/2)	46,600	93,200
		1,00,400			1,00,400

Note: 1) A is not entitled to a salary in absence of any agreement.
2) Partners are not entitled to any interest on capital.
3) In the absence of any agreement, profits should be distributed equally.

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