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Zorluk: Çok zorNature of Partnership and Provisions of Partnership Deed

On 1st April 2025, Taraba, Keffi, and Zaria formed a partnership business without executing a formal partnership deed, contributing capital of ₦5,000,000₦5,000,000, ₦3,000,000₦3,000,000, and ₦2,000,000₦2,000,000 respectively. On 1st July 2025, Taraba advanced a loan of ₦1,200,000₦1,200,000 to the firm. For the 9-month financial period ended 31st December 2025, Zaria managed daily operations claiming a total salary of ₦900,000₦900,000, while Keffi withdrew ₦400,000₦400,000 for personal use. The draft net profit before accounting for any partner claims or loan interest was ₦4,830,000₦4,830,000. Under the provisions of the Partnership Act 1890, what is the amount in Naira (₦₦) creditable to Taraba as his share of profit for the period?

Cevap: 1600000 ₦

Cevap

The amount creditable to Taraba as his share of profit for the period is ₦1,600,000.
Under the statutory default rules of the Partnership Act 1890, when no partnership deed exists: (1) No salary is payable to any partner, so Zaria's ₦900,000 claim is ignored. (2) Interest on a partner's loan is allowed at 5% per annum and treated as a charge against profit. For 6 months (1st July to 31st December 2025), loan interest is ₦1,200,000 × 5% × (6/12) = ₦30,000. (3) The net profit available for distribution becomes ₦4,830,000 - ₦30,000 = ₦4,800,000. (4) Profits are shared equally among the three partners, giving Taraba a share of ₦4,800,000 ÷ 3 = ₦1,600,000.

Adım Adım Çözüm

1
Identify applicable statutory provisions under the Partnership Act 1890
Disallow Zaria's salary claim of ₦900,000, disallow interest on capital and drawings, allow 5% p.a. interest on Taraba's loan advance, and share remaining profit equally among all three partners.
In the absence of a written partnership agreement, statutory provisions of the Partnership Act 1890 govern partner entitlements.
2
Calculate time-apportioned interest on Taraba's loan advance
₦1,200,000 × 0.05 × (6 / 12) = ₦30,000
Taraba provided the loan on 1st July 2025, so interest runs for 6 months until 31st December 2025. Loan interest is a charge against profit.
3
Calculate net distributable profit
₦4,830,000 - ₦30,000 = ₦4,800,000
Interest on a partner loan must be debited to the Profit and Loss Account before arriving at the net profit available for appropriation.
4
Compute Taraba's share of net profit
₦4,800,000 / 3 = ₦1,600,000
Under statutory provisions, profits and losses are shared equally regardless of initial capital contributions.

Anahtar Kavram

Statutory default provisions of the Partnership Act 1890 regarding loan interest and equal profit allocation
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Nature of Partnership and Provisions of Partnership Deed

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