Question

A and B are partners sharing profits in the ratio of 3 : 2 with capitals of ` 50,000 and ` 30,000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of ` 2,500. A provision of 5% of net profit is to be made in respect of Manager’s Commission and rent of ` 24,000 is to be accounted being payable to A. Profit for the year before manager’s commission and rent to A was ` 39,000​

Answer 1

Answer:

Answer is In the above Image

Explanation:

1. Manager's Commission will be accounted after deducting all expenses that are charge against profit.
2. Hence Rent paid to A is a charge against profit and it is deducted from net profit.
3. The profit is transfered to partners respective capital account and this profit is called as divisible profit.