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Question
Pick the odd one out
Options
Partners share profits and losses equally
Interest on partners’ capital is allowed at 7% per annum
No salary or remuneration is allowed to partners
Interest on loan from partners is allowed at 6% per annum.
Solution
Interest on partners’ capital is allowed at 7% per annum
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RELATED QUESTIONS
Which of the following is the incorrect pair?
Akash, Bala, Chandru and Daniel are partners in a firm. There is no partnership deed. How will you deal with the following?
- Akash has contributed maximum capital. He demands interest on capital at 10% per annum.
- Bala has withdrawn ₹ 3,000 per month. Other partners ask Bala to pay interest on drawings @ 8% per annum to the firm. But, Bala did not agree to it.
- Akash demands the profit to be shared in the capital ratio. But, others do not agree.
- Daniel demands salary at the rate of ₹ 10,000 per month as he spends full time for the business.
- Loan advanced by Chandru to the firm is ₹ 50,000. He demands interest on loan @ 12% per annum.
Ahamad and Basheer contribute ₹ 60,000 and ₹ 40,000 respectively as capital. Their respective share of profit is 2 : 1 and the profit before interest on capital for the year is ₹ 5,000. Compute the amount of interest on capital in each of the following situations:
- if the partnership deed is silent as to the interest on capital
- if interest on capital @ 4% is allowed as per the partnership deed
- if the partnership deed allows interest on capital @ 6% per annum.
Mani is a partner, who withdrew ₹ 30,000 on 1st September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed.
Kevin and Francis are partners. Kevin draws ₹ 5,000 at the end of each quarter. Interest on drawings is chargeable at 6% p.a. Calculate interest on drawings for the year ending 31st March 2019 using the average period.
Ram and Shyam were partners. Ram withdrew ₹ 18,000 at the beginning of each half year. Interest on drawings is chargeable @ 10% p.a. Calculate interest on the drawings for the year ending 31st December 2018 using the average period.
Mani is a partner, who withdrew ₹ 30,000 on 1st September 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December 2018 and show the journal entries by assuming that the fluctuating capital method is followed.
Mani is a partner, who withdrew ₹30,000 on 1st September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed.
Mani is a partner, who withdrew ₹30,000 on 1st September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed.
Mani is a partner who withdrew ₹ 30,000 on 1st September 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December 2018 and show the journal entries by assuming that the fluctuating capital method is followed.
