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:

Net profit for the year will be ______.

Options

• ₹ 77,000

• ₹ 69,300

• ₹ 70,000

• ₹ 1,25,000

Answer 1

Net profit for the year will be ₹ 69,300.

Explanation:

Dr.	Profit and Loss Account		Cr.
Particulars	₹	Particulars	₹
To Rent	48,000	By Profit for the year	1,25,000
To Manager’s Commission: `77,000 xx 10/100`	7,700
To Net Profit transferred to Profit and Loss Appropriation A/c	69,300
	1,25,000		1,25,000