Harshad and Dhiman are in partnership since 1st April 2022. No Partnership agreement was made. They contributed ₹ 4,00,000 and ₹ 1,00,000 respectively as capitals. In addition, Harshad had given a loan of ₹ 1,00,000 to the firm on 1st October 2022. Due to a long illness, Harshad could not participate in business activities from 1st August 2021 to 30th September 2022. Profit for the year ended 31st March 2023 was ₹ 1,80,000. A dispute has arisen between Harshad and Dhiman.
Harshad and Dhiman are in partnership since 1st April 2022. No Partnership agreement was made. They contributed ₹ 4,00,000 and ₹ 1,00,000 respectively as capitals. In addition, Harshad had given a loan of ₹ 1,00,000 to the firm on 1st October 2022. Due to a long illness, Harshad could not participate in business activities from 1st August 2021 to 30th September 2022. Profit for the year ended 31st March 2023 was ₹ 1,80,000. A dispute has arisen between Harshad and Dhiman.
Harshad Claims:
i) He should be given interest @ 10% per annum on capital and loan,
ii) Profit should be distributed in the ratio of capital.
Dhiman Claims:-
i) Profits should be distributed equally;
ii) He should be allowed ₹ 2,000 p.m. as remuneration for the period he managed the business in the absence of Harshad;
iii) Interest on Capital and loan should be allowed @ 6% p.a.
You are required to settle the dispute between Harshad and Dhiman. Also, prepare a Profit and Loss Appropriation Account.
Anurag Pathak Changed status to publish April 12, 2023
Solution:-
Harshad Claims:-
i) In the absence of a partnership deed, provisions of the Indian Partnership Act 1932 Applied. No Interest on capital is provided and interest on a loan of the partner is given @ 6% p.a.
ii) In the absence of a partnership Deed, provisions of the Indian Partnership Act 1932 Applied. Profit should be distributed equally.
Dhiman Claims:-
i) In the absence of a partnership deed provisions of the Indian Partnership Act 1932 applied. His claim is right that profits should be shared equally.
ii) In the absence of a partnership deed, provisions of the Indian Partnership Act 1932 applied. No remuneration will be allowed to Dhiman.
iii) In the absence of a partnership deed provisions of the Indian partnership Act 1932 applied. No Interest on capital is provided and interest on a loan of the partner is given @ 6% p.a.
Anurag Pathak Changed status to publish April 13, 2023
