Question

Arif, Ravi and Ben are partners in a firm sharing profits and losses in the ratio of 6 : 4 : 1. Arif guaranteed a minimum profit of ₹ 16,000 to Ben. The trading profit of the firm for the year ending 31st March, 2021, was ₹ 1,32,000. Arif’s share in the profits of the firm will be ______.

Options

• ₹ 72,000

• ₹ 68,000

• ₹ 69,600

• ₹ 16,000

Answer 1

Arif, Ravi and Ben are partners in a firm sharing profits and losses in the ratio of 6 : 4 : 1. Arif guaranteed a minimum profit of ₹ 16,000 to Ben. The trading profit of the firm for the year ending 31st March, 2021, was ₹ 1,32,000. Arif’s share in the profits of the firm will be ₹ 68,000.

Explanation:

Total Profit of the firm = ₹ 1,32,000

Profit-sharing ratio = 6 : 4 : 1

Ben’s share of profit =  `1,32,000 xx 1/11`

= ₹ 12,000

Ben is guaranteed a minimum profit of ₹ 16,000.

Deficiency in Ben’s Share = Minimum guarantee – Share of profit

= 16,000 – 12,000

= ₹ 4,000

Arif’s share in profit = `1,32,000 xx 6/11`

= ₹ 72,000

Arif’s Share in Profit after bearing Ben’s deficiency = 72,000 − 4,000

= ₹ 68,000