Question

A, B and C are partners sharing profits in 3 : 2 : 1. C’s share of profits for the year ending 31st March 2024 amounts to ₹ 50,000. Interest allowed on the partner’s capital is ₹ 1,50,000, and A is allowed a salary of ₹ 5,000 per month. Interest charged on the partner’s drawings is ₹ 2,000. What was the net profit of the firm before any appropriations?

पर्याय

• ₹ 5,08,000

• ₹ 92,000

• ₹ 2,12,000

• ₹ 4,53,000

Answer 1

₹ 5,08,000

Explanation:

The total distributable profit is calculated by dividing C’s share of profit by C’s share in the ratio:

Total Distributable Profit = `(50,000)/(1/6)`

= 50,000 × 6

= ₹ 3,00,000

Interest on Partner’s Capital = ₹ 1,50,000

A’s Annual Salary = ₹ 5,000 × 12

= ₹ 60,000

Total Expenses = ₹ 1,50,000 + ₹ 60,000

= ₹ 2,10,000

Interest on Partner’s Drawings = ₹ 2,000

Net Appropriations = Total Expenses − Total Income

= 2,10,000 − 2,000

= ₹ 2,08,000

Net Profit Before Appropriations = Total Distributable Profit + Net Appropriations

= 3,00,000 + 2,08,000

= ₹ 5,08,000