Practicing Success
Read the following information and answer the questions : A and B entered into partnership to supply stationery items without any terms and conditions. A contributed ₹ 1,00,000 as capital while B contributed 20,000 only but he allow his building to be used as the firm office. After running business for nearly nine months they felt urgency of funds and same was fulfilled by B by providing ₹ 80,000 as loan to the firm. At the end of the accounting year, they made a profit of ₹50,000. They decide to expand their business in future by admitting C into the firm and also to make agreement in writing containing all the terms and conditions. |
In case A want to claim interest on capital as he had contributed five times of capital what B had contributed than select the amount of interest on capital that will be paid to A. |
₹ 8,000 ₹ 6,000 Interest on capital will be provided 6% p.a. No interest on capital will be allowed to A |
No interest on capital will be allowed to A |
The correct answer is Option 4- No interest on capital will be allowed to A. When there is no clause regarding interest on capital between the partners then no interest is provided to partners no matter how much is contributed by partners. If there is no clause in the partnership deed of the partnership firm then the provisions of the Partnership Act, 1932 will be applicable. Some of the provisions are: |