In the absence of agreement, partners are not entitled to interest on capital contributed by them. So Sabu’s claim is not admitted.
1. In the absense of agreement, partners are not entitled to any salary or other remuneration.
2. In the absence of written agreement, partners are entitled to share profits equally, Here, net profit is divided equally among Sabu and Sekhar.
Profit for the year = 50,600
Less: Interest on Sabus loan (20000 × 6/100 × 6/12) = 600
The actual profit = 50,000
In the absence of agreement, partners are entitled to interest on loan (to the firm) at the rate of 6% p.a. Sabu’s share of profit = 50,000 × \(\frac{1}{2}\) = 25000
Stephen’s share of profit = 50000 × \(\frac{1}{2}\) = 25000.