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Answer:- i) Interest on Capital will not be allowed (paid) ii) Interest on drawings will not be charged iii) Interest on loan from a partner will be allowed (Paid) @ 6% p.a. iv) profit/Loss will be shared equally.
Answer:- Yes, if the Partnership Deed so provides.
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…
Answer:- No, it is not compulsory but is preferable to have a Partnership Deed.
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.
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.
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.
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.
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.
Answer:- Nil, because in the absence of a Partnership Deed interest on Capital is not allowed.