Rules applicable in absence of partnership deed OR Discuss the rules if there is no Partnership Agreement. [Jan. 2021, 5 Marks]
Options
A
B
C
D
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Partnership and LLP AccountsQ-1 | Partnership and LLP AccountsQuestion 5162 of 108
All Questions Correct Answer
✅ Option — Correct Option
All Options:
- A
- B
- C
- D
Detailed Solution & Explanation
Rules applicable in absence of partnership deed:
In the absence of any provision in partnership deed, following provisions of partnership Act
are applicable:
a. Profit/Loss sharing ratio will be equal,
b. No interest is to be allowed on capital,
c. No interest is to be charged on drawings,
d. 6% per annum interest is to be given on partner's loan,
e. No salary is to be paid to any partner,
f. Interest and salary, if payable, will be paid only if there is profit unless agreement
provides otherwise.
Key Concepts to Understand
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Following are the details of Assets and Liabilities of Mr. Sarthak for the year ended 31 March, 2023 and 31 March, 2024: 31.03.2023 31.03.2024 Assets Buildings Furniture Inventory Sundry debtors Cash at bank Cash in hand Liabilities: Loans Sundry Creditors 2,00,000 75,000 1,05,000 68,000 72,500 2,400 1,50,000 58,400 ? ? 1,95,000 94,000 86,800 3,800 1,25,000 79,500 It was decided to depreciate Building by 5% p.a. and Furniture by 10% p.a. On 1st June, 2023 an additional capital of 40,000 was brought in the business. Proprietor has withdrawn @ ₹ 2,500 p.m. for meeting the family expenses. Prepare Statement of Affairs as on 31 March, 2023 and 31 March, 2024. Find the profit or loss earned by Mr. Sarthak for the year ended 31st March, 2024. [Jan. 2025, 5 Marks]
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