Ram & Shyam are partners in the ratio of 3:2. Before profit distribution , Ram is entitled to 5% commission of the net profit (after charging such commission). Before charging commission, firm’s profit was Rs. 42,000. Shyam’s share in profit will be:
a) 16000
b) ₹24000
c) ₹26000
d) ₹ 16,400
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Option a) Rs 16,000
Explanation:
Ratio of Ram and Shyam = 3 : 2
Ram : Shyam = 3 : 2
Ram's share = 3/5
Shyam's share = 2/5
Before profit distribution,
Ram's Commission = 5% of of the net profit (after charging such commission)
firm’s profit = Rs. 42,000
Ram's Commission = Net profit before commission × (Rate/100 + Rate)
= 42,000 × (5/(100 + 5))
= 42,000 × (5/105)
= 2,000
Ram's Commission = Rs. 2,000
= 42,000 - 2,000
= Rs. 40,000
Shyam's share = 2/5
= 40,000 × (2/5)
= 16,000
Shyam's share = Rs. 16,000
Hence, option a) Rs. 16,000
Shyam’s share in profit will be Rs. 16,000
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