Can a partner be exempted from sharing the losses in a firm? If yes, under what circumstances?
Answer:- Yes, if the Partnership Deed so provides.
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Give two reasons in favour of having a Partnership Deed.
Answer:- Partnership Deed is a useful document because: i) It regulates the rights, duties, and liabilities of each partner. ii) If any dispute arises between/among the partners, then it can be settled on the basis of the Partnership Deed as…
Is it compulsory for firms to have a Partnership Deed?
Answer:- No, it is not compulsory but is preferable to have a Partnership Deed.
Aman and Boman are partners in a firm without a Partnership Deed. Aman manages the business and thus, claims salary of ₹ 18,000 per month. State with reasons whether his claim is valid or not.
Answer:- Aman’s Claim is not valid as in the absence of a partnership Deed, salary to partners is guided by the Indian Partnership Act, of 1932. The Act does not allow the payment of salary to a partner.
Suresh and Ramesh are partners in a firm with a capital of ₹ 3,00,000 and ₹ 4,00,000 respectively.
Answer:- No Ramesh’s Claim is not valid as in the absence of a partnership Deed, profit sharing is guided by the Indian Partnership Act, 1932. The act provides for sharing profits equally.
What is meant by Net Profit?
Answer:- Net Profit means profit earned by the firm from its Operating and Non-operating Activities. It is ascertained by preparing Profit and Loss Account.
What is meant by Divisible Profit?
Answer:- Divisible profit means profit remaining to be distributed between/among partners after allowing remuneration (i.e., Salary, Commission, etc.) to partners, interest on capital, transfer to reserve, and charging interest on drawings.
Kanha, Neeraj and Asha were partners in a firm. They admitted Raghav their landlord as a partner in the firm. Raghav brings sufficient amount of capital and goodwill premium for his share in the profits. Raghav had given a loan of ₹ 1,00,000 @ 10% p.a. interest to the partnership firm before he became the partner. Now the accountant of the firm is emphasising that the interest on loan should be paid @ 6% p.a. Is he right in doing so? Give reason in support of your answer.
Answer:- No, the Accountant is not right in doing so because Raghav had given a loan of ₹ 1,00,000 @ 10% p.a. interest to the partnership firm which is agreed to be paid.
Mita and Mohan are partners sharing Profits and Losses in the ratio of 1 : 2 with capitals of ₹ 15,000 and ₹ 25,000 respectively. The Partnership Deed provides for interest on capital @ 6% per annum. The trading loss for the year ending 31st March, 2016 was ₹ 1,500. State, giving reason, the amount of interest of capital which will be allowed to the partners.
Answer:- Nil, because in the absence of a Partnership Deed interest on Capital is not allowed.
A partner has given loan of ₹ 20,000 to the firm on 1st July, 2022. The Partnership Deed is silent as to the interest on Loan by Partner. State giving reason, how much amount of interest on Loan will be allowed if loss before interest for the year ended 31st March, 2023 was ₹ 5,000.
Answer:- Interest on Loan by Partner = ₹ 20,000 * 6/100 * 9/12 = ₹ 900
