Skip to Content

Question 6:

X and Y are partners sharing profits and losses in the ratio of 2 : 3 with capitals of ₹2,00,000 and ₹3,00,000 respectively. On 1st October 2023, X and Y gave loans of ₹80,000 and ₹40,000 respectively to the firm. Show the distribution of profits/losses for the year ended 31st March 2024 in each of the following alternative cases:

Cases:

  • Case 1: If the profit before interest for the year amounted to ₹21,000.
  • Case 2: If the profit before interest for the year amounted to ₹3,000.
  • Case 3: If the profit before interest for the year amounted to ₹5,000.
  • Case 4: If the loss before interest for the year amounted to ₹1,400.

Hint: Interest on loan by a partner is a charge against profit.

SOLUTION :-