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 allowed his building to be used as the firm office. After running business for nine months, they felt an urgency of funds and the 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 decided 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.
Select the amount that will be paid to B as interest on loan.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹1,200
There is no agreement, so the Partnership Act applies: a partner who lends money to the firm gets interest at 6% p.a. B gave the loan after nine months, so it was used for the last 3 months of the year.
Interest on B’s loan = ₹80,000 × 6/100 × 3/12
= ₹1,200
NCERT (2026-27 edition): |