Ram and 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 ₹42,000. Shyam’s share in profit will be
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Explanation:
Solution :
★ Profit sharing ratio =
Ram : Shyam = 3 : 2
Ram is entitled to 5% commission of the net profit (after charging such commission).
Before charging commission, firm’s profit was ₹ 42,000
Commission :
= Net profit before charging such commission × [Rate/(100 + 5)]
= 42,000 × [5/(100 + 5)]
= 42,000 × 5/105
= 2,000
Commission = 2,000
= 42,000 - 2,000
= 40,000
Shyam's share = 2/5
★ Shyam’s share in profit =
= 2/5 × 40,000
= 16,000
Shyam’s share in profit = ₹ 16,000
Therefore, Shyam’s share in profit will be ₹ 16,000
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