Question

Anurag and Abhishek are partners sharing profits and losses in the ratio of 3:2. Their capital accounts showed balances of Rs. 1,50,000 and Rs. 2,00,000 respectively on Jan 01, 2003. Show the treatment of interest on capital for the year ending December 31, 2019, in the following statement.

"If the partnership deed is silent as to the payment of interest on capital and the profit for the year is Rs. 50,000".

विकल्प

• No interest will be paid on the capital to the partners.

• Interest will be paid on the capital to the partners.

• Cannot be determined.

• None of the above

Answer 1

No interest will be paid on the capital to the partners.

Explanation:

If the Deed does not contain a specific clause. The partners will not be paid any interest in their capital. However, the entire benefit will be dispersed among the partners according to their profit sharing ratio.