(c) At 6% Simple Interest (d) At 6% Annual Simple Interest 7. A and B are partners' with capitals * 10,000 and 6,000. Interest payable at 6% P. A. B gets *300 monthly salary. Profit before salary and Interest is * 8,000. The profit will be divided between A and B will be : [CPT August 2007) (a) * 1,720 to both (b) * 2,000 to A and * 1,440 to B (c) A 1,440 and B2,000 (d) None of the above
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Explanation:
Profit after interest and remuneration :-
= Profit before interest and remuneration - Interest - remuneration
= Rs-8,000 - (600 + 360) - (3,600)
= Rs-3,440.
Distributing profit is equal ratio among partners = Rs-3,440 / 2
= Rs-1,720 to each partner.
Working notes:-
Interest on capital = Capital x rate of interest
A:-
= 10,000 x 6/100
= Rs-600
B:-
= 6,000 x 6/100
= Rs-360.
B's remuneration = Rs-300 x 12
= Rs-3,600
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