Question

Abhay and Baldwin are partners sharing profit in the ratio 3 : 1. On 31st March 2021, the firm’s net profit is ₹ 1,25,000. The partnership deed provided interest on capital to Abhay and Baldwin ₹ 15,000 and ₹ 10,000, respectively, and interest on drawings for the year amounted to ₹ 6,000 from Abhay and ₹ 4,000 from Baldwin. Abhay is also entitled to commission @ 10% on net divisible profits. Calculate profit to be transferred to Partners Capital A/c’s.

पर्याय

• ₹ 1,00,000

• ₹ 1,10,000

• ₹ 1,07,000

• ₹ 90,000

Answer 1

₹ 1,00,000

Explanation:

i. Interest on Capital:

Abhay = ₹ 15,000

Baldwin = ₹ 10,000

Total Interest on Capital = 15,000 + 10,000

= ₹ 25,000

ii. Interest on Drawing:

Abhay = ₹ 6,000

Baldwin = ₹ 4,000

Total Interest on Drawing = 6,000 + 4,000

= ₹ 10,000

iii. Net Divisible Profits (before commission):

Net divisible profits = Net Profit + Total Interest on Drawing − Total Interest on Capital

= 1,25,000 + 10,000 − 25,000

= ₹ 1,10,000

iv. Abhay’s commission:

Abhay’s commission is calculated at 10% on net divisible profits.

Since the commission is on net divisible profits, it is calculated as:

Abhay Commission = `"Net Divisible Profits" xx 10/(100 + 10)`

= `1,10,000 xx 10/110`

= ₹ 10,000

v. Final Net Divisible Profit (after commission):

Final Net Divisible Profit = Net Divisible Profits − Commission

= 1,10,000 − 10,000

= ₹ 1,00,000