Question : P, Q and R are in a partnership business. P used Rs.1,00,000 of the firm for some speculation activity and earned a profit of Rs.75,000. Which decision is the most appropriate regarding this case?
Option 1: P must return Rs.1,00,000 to the firm
Option 2: P must pay back Rs.1,00,000 equally Q and R
Option 3: P must return Rs.1,75,000 to the firm
Option 4: P must sacrifice his share of profit of Rs.75,000 in that year
Correct Answer: P must return Rs.1,75,000 to the firm
Solution : Partner needs to return the profit along with the firm's assets. P must return to the firm = Speculation activity + Profit = Rs.1,00,000 + Rs.75,000 = Rs.1,75,000. Hence, the correct option is 3.
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