Question

26. Manpreet and Harmeet are partners sharing profits in the ratio of 3 : 1 with capitals of
1,00,000 and 40,000 respectively. Interest on capital is agreed @ 10% p.a. Harmeet is to be
allowed a salary of 500 per month. During the year they withdrew 10,000 each. Profit for the
year amounted to $ 36,000 prior to appropriations and before charging depreciation on
furniture 2,000 and writing off bad debts 1,000. Manager is to be allowed a commission of
10% of profit after charging such commission.
Show the distribution of profit between partners.​

Answer 1

Explanation:

Profit is rs 36000- (2000 for depreciation+1000 for bad debt) 3000 =33000

manager commission will be 33000*10/100 =3300

33000-3300=29700/4 =7425

Profit of Manpreet is 7425*3=22275

Harmeet =7425

Answer 2

withdrew 10000 during the year