Question

Satbir, Deepak and Mohit are partners in a firm (which fulfills the conditions of Section 184) sharing profits and losses equally. The firm’s Profit and Loss Account for the year ended 31st March 2019 showed net profit of Rs. 2,44,000 after debiting, inter alia the following amounts: (i) Salary of Rs. 4000 per month paid to Mohit. (ii) Rent of Rs. 19,000 paid to Satbir for the portion of the building owned by Satbir in which firm’s office situated. The fair rental value of the building is Rs. 10.000. (iii) Interest on Capital paid @ 12% to Deepak, Satbir and Mohit Rs. 12,000 each. (iv) Commission paid to Deepak Rs. 40,000. (v) Expenses of current repairs of the business premises belonging to Satbir, Rs. 1000. (vi) Donation to approved bodies Rs. 5,000 by cheque. (vii) Salary to Mohit’s daughter Rs. 72,000. Mohit’s daughter is a qualified management graduate and was serving another concern on Rs. 5,800 p.m. The Net profit of Rs. 2,44,000 included Rs. 12,000 from interest on Government Securities. Compute total income of the firm for the Assessment Year 2019-20. 15​

Answer 1

given:

Firm profit $2019$⇒$2,44,000 Rs$

to find the total income of the company

let's first calculate the expenses of the whole $2019-2020$

∴ 1. Salary of $Rs. 4000$ per month paid to Mohit. ⇒ $4000$×$12$ = $48000 rs$

   2. Rent o f$Rs. 19,000$ paid to Satbir for the portion of the building owned       by Satbir in which firm’s office situated.

   3. The fair rental value of the building is$Rs. 10.000.$

   4. Interest on Capital paid 12% to Deepak, Satbir and Mohit $Rs. 12,000$each. ⇒ $12000$×$3$ = $36000 Rs$

   5. Commission paid to Deepak $Rs. 40,000$

   6. Expenses of current repairs of the business premises belonging to Satbir,$Rs. 1000.$

   7. Donation to approved bodies $Rs. 5,000$ by cheque.

   8. Salary to Mohit’s daughter + serving another concern. $Rs. 72,000 + 5,800 = 77,800 Rs$    

total income will be given by

gross income - expenses = net income %⇅

$2,44,000$ - $2,36,800$ = $7200 Rs$