Sarthaks Test
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Mahesh and Ramesh are partners with capitals of Rs.50,000 and Rs.60,000 respectively. On 1st January, 2016, Mahesh gives a loan of Rs.10,000 and Ramesh introduced Rs.20,000 as additional capital. Profit for the year ended 31st March, 2016 was Rs.15,200. There is no Partnership Deed. Both Mahesh and Ramesh expect interest @ 10% p.a. on the loan and additional capital advanced by them. Show how the profits would be divided? Give reasons.

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ParticularsRs.particularsRs.
To interest on mahesh's loan150By net profit b/d15,200
To profit transferred to:
Mahesh's capital A/C          7,525
Ramesh's                             7,525
15,050
15,20015,200

Working Note

1, Calculation of interest on mahesh loan

Amount of loan given by mahesh =Rs.10.000

Period (from jan 01 to march 31,2016 ) =3 months

2. Calculation of interest on capital

No, interest on capital will be allowed to the parthers

Note: There is no partnership deed between mahesh and ramesh therefore as per partnership act

 a. interest on loan will be allowed at 6% p.a

b.No interest on parters capital will be allowed and

c.profit after interest on mahesh loand will be distributed  equally between mahesh and ramesh

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