A and B are partners sharing profits and losses in the ratio of 7:3 with capitals of 8,00,000 and 6,00,000 respectively. According to partnership deed interest on capital is to be provided @ 8% p.a. and is to be treated as a charge. Profit for the year is 80,000. Choose the correct option
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share of loss to A=15400
share of loss to B=6600
Explanation:
as IOC is a charge against profit so we have to allow it even on loss
IOC of A=8,00,000×8÷100= 64000
IOC of B=6,00,000×8÷100=48000
total profit-Total IOC=80,000-1,12,000=loss by 22000
share of will be shared in 7:3
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