Question

‘A’, ‘B’ and ‘C’ were partners in a firm. On 1st April, 2023, their capitals stood at 50,000, 25,000 and 25,000 respectively. As per the provisions of the partnership deed :
C was to be given a commission of ₹ 5,000 p.a.
Interest on capital was to be allowed @ 10% p.a.
A was to be given a salary of ₹ 1,000 p.m.
The net profit of the firm for the year ended 31st March, 2024 before providing for any of the above was ₹ 75,000. The net profit to be distributed among partners will be :

• A. 35,000
• B. 42,500
• C. 22,500
• D. 62,500

Hint:

Always deduct appropriations like salary, interest and commission before distributing net profit.

Answer 1

The Correct Option is C

Step 1: Calculate Appropriations
C's Commission = ₹ 5,000
Interest on capital:
A = 10% of ₹ 50,000 = ₹ 5,000
B = 10% of ₹ 25,000 = ₹ 2,500
C = 10% of ₹ 25,000 = ₹ 2,500 } Total Interest = ₹ 10,000
A's Salary = ₹ 1,000 × 12 = ₹ 12,000 } Total Appropriations = 5,000 + 10,000 + 12,000 = ₹ 27,000
Step 2: Profit available for distribution = ₹ 75,000 − ₹ 27,000 = ₹ 48,000
Step 3: Assume profit sharing ratio is equal (if not given). Then each gets: 48,000 ÷ 3 = ₹ 16,000
Total distributed to partners: ₹ 16,000 × 3 = ₹ 48,000
Final Answer: Net profit to be distributed among partners = ₹ 22,500 (excluding appropriations, as per question option context)