5 :- Harshad and Dhiman are in partnership since 1st April 2024. No Partnership agreement was made. They contributed Rs 4,00,000 and Rs 1,00,000 respectively as capitals. In addition, Harshad had given a loan of Rs 1,00,000 to the firm on 1st October, 2024. Due to a long illness, Harshad could not participate in business activities from 1st August 2024 to 30th September 2024. Profit for the year ended 31st March, 2025 was Rs 1,80,000. A dispute has arisen between Harshad and Dhiman.
Harshad Claims:
i) He should be given interest @ 10% per annum on capital and loan,
ii) Profit should be distributed in the ratio of capital.
Dhiman Claims:-
i) Profits should be distributed equally;
ii) He should be allowed Rs 2,000 p.m. as remuneration for the period he managed the business in the absence of Harshad;
iii) Interest on Capital and loan should be allowed @ 6% p.a.
You are required to settle the dispute between Harshad and Dhiman. Also, prepare a Profit and Loss Appropriation Account.
Solution:- HARSHAD CLAIMS :
(i) As per the provisions of the Indian Partnership Act 1932, he will not be provided any interest on capital and interest on loan will be provided @6% p.a.
(ii) As per the provisions of the Indian Partnership Act 1932, profit will be distributed equally and not in capital ratio
DHIMAN CLAIMS –
(i) As per the provisions of the Indian Partnership Act 1932, His claim is right that the profits should be shared equally.
(ii) As per the provisions of the Indian Partnership Act 1932, No renumeration will be allowed to Dhiman.
(iii) As per the provisions of the Indian Partnership Act 1932, no interest on capital will be provided and interest on loan will be provided @6% p.a.
