Question

Mukesh and Navdeep are partners sharing profits in 2 : 1 with fixed capitals of ₹ 6,00,000 and ₹ 4,00,000, respectively. As per their partnership deed: Navdeep is entitled to a rent of ₹ 48,000 per year for using his property by the firm. They are entitled to interest on capital @ 8% p.a. The manager is allowed a commission of 10% on net profit before charging such commission. Profit for the year ending 31st March, 2025, before any of the above adjustments, amounted to ₹ 1,25,000.

Answer the following question on the basis of the above:

Interest on capital will be ______.

Options

• Mukesh ₹ 46,200 and Navdeep ₹ 23,100

• Mukesh ₹ 48,000 and Navdeep ₹ 32,000

• Mukesh ₹ 42,000 and Navdeep ₹ 28,000

• Mukesh ₹ 41,580 and Navdeep ₹ 27,720

Answer 1

Interest on capital will be Mukesh ₹ 41,580 and Navdeep ₹ 27,720. 

Explanation:

	₹
Interest on Mukesh’s Capital: 8% on ₹ 6,00,000	48,000
Interest on Navdeep’s Capital: 8% on ₹ 4,00,000	32,000
	80,000

Since available profit is only ₹ 69,300, which is less than interest payable of ₹ 80,000, profit will be distributed in the ratio of interest on capital, i.e., ₹ 48,000 : ₹ 32,000 or 3 : 2.

Mukesh’s share = `69,300 xx 3/5`

= ₹ 41,580

Navdeep’s share = `69,300 xx 2/5`

= ₹ 27,720