Question

Illustration 2 : Hansa, Hitesh and Vijay are partners of a firm. Their capital proportion is 3:2:1. Hitesh
is entitled to receive commission 10 % of net profit after deduction of his such share. What amount
will be received by Hitesh, When profit of the firm is * 1,65,000 at the end of the year.​

Answer 1

ANSWER :

• ❖ If Hansa, Hitesh and Vijay are partners of a firm and their capital proportion is 3 : 2 : 1 and Hitesh is entitled to receive commission 10% of net profit after deduction of his such share; then the amount to be received by Hitesh, when profit of the firm is Rs. 1,65,000 at the end of the year will be Rs. 65,000.

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SOLUTION :

❒ Given :-

• Capital proportion of Hansa, Hitesh and Vijay is 3 : 2 : 1

• Hitesh is entitled to receive commission 10% of net profit after deduction of his such share.

• Profit of the firm is at the end of the year is Rs. 1,65,000

❒ To Calculate :-

• Amount to be received by Hitesh = ?

❒ Calculation :-

Here,

• Profit of the Firm = Rs. 1,65,000

• Rate of Commission = 10%

It is given that,

• Hitesh is entitled to receive the commission of net profit after deduction of his such share.

We know that,

• If commission is payable from profit after deduction of such commission, the computation of the amount of commission is done as follows :

$\dag \: \: \underline{ \boxed{ \rm{ \: Commission = Net \: \: Profit \times \dfrac{Rate \: \: of \: \: Commission}{100 + Rate \: \: of \: \: Commission}}}}$

Using this formula,

• $\bigstar\: \: \sf{ \: Commission = Net \: \: Profit \times \dfrac{Rate \: \: of \: \: Commission}{100 + Rate \: \: of \: \: Commission}}$

$\sf{\implies \: Commission = 1,65,000 \times \dfrac{10}{100 + 10}}$

$\sf{\implies \: Commission = 1,65,000 \times \dfrac{10}{110}}$

$\sf{\therefore \: Commission = 15,000}$

Thus,

• ✠ Profit after Commission (Distributable Profit) = Total Profit - Commission

⇒ Profit after Commission = Rs. 1,65,000 - Rs. 15,000

⇒ Profit after Commission = Rs. 1,50,000

[It is not mentioned that at what ratio the profit of the firm will be distributed among the partners. So, it can be assumed that the profit will be distributed either in their capital proportions or in a equal ratio.]

• ❍ When profit is distributed among the partners in their Capital proportions :-

Here,

• Capital proportion of Hansa, Hitesh and Vijay is 3 : 2 : 1.

• Distributable profit = Rs. 1,50,000

∴ Share of Hitesh = $\sf{\dfrac{2}{6}}$

➜ Share of Hitesh = $\sf{\dfrac{1}{3}}$

So,

• ★ Amount of profit received by Hitesh = $\sf{\dfrac{1}{3}}$ of Rs. 1,50,000

⇒ Amount of profit received by Hitesh = Rs. 50,000

• ❍ When profit is distributed among the partners equally :-

Here,

• Profit sharing ratio of Hansa, Hitesh and Vijay will be 1 : 1 : 1.

• Distributable profit = Rs. 1,50,000

∴ Share of Hitesh = $\sf{\dfrac{1}{3}}$

So,

• ★ Amount of profit received by Hitesh = $\sf{\dfrac{1}{3}}$ of Rs. 1,50,000

⇒ Amount of profit received by Hitesh = Rs. 50,000

Now,

• Amount of profit received by Hitesh = Rs. 50,000

• Commission received by Hitesh = Rs. 15,000

Hence,

• ✪ Total amount received by Hitesh = Profit + Commission

➨ Total amount received by Hitesh = Rs. 50,000 + Rs. 15,000

∴ Total amount received by Hitesh = Rs. 65,000