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A and B are partners from 1st April, 2015, without any partnership agreement and they introduce capitals of Rs.35,000 and Rs.20,000 respectively. On 1st October, 2015, A advances Rs.8,000 by way of loan the firm without any agreement as to interest. The Profit and Loss Account for the year end 31st March, 2016 discloses a profit Rs.15,000 but the partners cannot agree upon the question interest or upon the basis of division of profits. You are required to divide the profits between them giving reasons for your method.

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Working notes:

1.Calculation of interest on loan

As per the partnership act, if there is no partner agreement regarding rate of interest on loan, it is provided at 6% p.a Amount loan = 8,000

period ( from  october 01 to march 31) = 6 months

2. Calculation of profit share of each partne

In the absence of partnrship deed profits of a firm are distributed equally amount all the partners.profit after interest  on A's loan =Rs.15000-240=14,760

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