Question

Omkar and Shiva were partners in a firm. Omkar was entitled to a salary of \rupee 20,000 p.a. while Shiva was entitled to a salary of \rupee 50,000 p.a. Net profit for the year ended 31st March, 2023, after charging the salaries of Omkar and Shiva, was \rupee 5,60,000. The total amount credited to Omkar’s capital account will be:

• A. \rupee 2,45,000
• B. \rupee 2,65,000
• C. \rupee 3,15,000
• D. \rupee 3,00,000

Hint:

When calculating profit distribution, always add back salaries or appropriations to net profit before dividing according to the profit-sharing ratio.

Answer 1

The Correct Option is D

Step 1: Calculate total profit:
The net profit after charging salaries was \rupee 5,60,000. To find the total profit before salaries: \[ \text{Total profit before salary} = \rupee 5,60,000 + \rupee 20,000 + \rupee 50,000 = \rupee 6,30,000. \] Step 2: Omkar's share in profit:
Salary credited to Omkar: \[ \text{Salary} = \rupee 20,000. \] Profit-sharing ratio between Omkar and Shiva is \(1:1\).
Omkar’s share in the divisible profit: \[ \text{Omkar's share in profit} = \rupee 6,30,000 \times \frac{1}{2} = \rupee 3,15,000. \] Step 3: Total amount credited to Omkar:
The total amount credited to Omkar’s capital account is the sum of his salary and share in profit: \[ \text{Total credited} = \rupee 20,000 + \rupee 3,15,000 = \rupee 3,00,000. \] Conclusion:
The total amount credited to Omkar’s capital account is \( \rupee 3,00,000 \).