Question

A and B are partners in a firm. A is entitled to a salary of ₹ 15,000 p.m. and a commission of 10% of net profit before charging any commission. B is entitled to a commission of 10% of net profit after charging his commission. Net profit for the year ended 31st March 2018 was ₹ 4,40,000. You are required to show the distribution of profit.

Answer 1

Answer:

salary to A = 15,000×12 = 1,80,000

commission to A = 4,40,000×10/100 = 44,000

commission to B = 4,40,000×10/110 = 40,000

if question asks for after charing such commission just add the rate on 100

Answer 2

The relevant table is attached below :

PARTICULARS    IN RUPEES         PARTICULARS IN RUPEES

1.    To Salary

A’s capital will be        1,80,000             By Net Profit           4,40,000

= 15000 x 12

2.   To commission

A’s capital will be

44,000                           84,000

So, 44000@10%

B’s capital will be

40,000                            1,76,000

So, 4,40,000@ 10/110

3. To Balance Profit

Referring to :

A’s capital = 88,000        

B’s capital = 88,000

                                      Total = 4,40,000                            Total = 4,40,000

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