Question

On 1st April, 2020, Pixie, Nixie, and Gypsy entered into a partnership with fixed capitals of ₹ 60,000, ₹ 50,000, and ₹ 30,000, respectively. On 1st October, 2020, Pixie gave a loan of ₹ 12,000 to the firm. The partnership deed contained the following clauses: Interest on drawings to be charged @ 4% per annum. Pixie is to be entitled to a rent of ₹ 2,000 per annum for allowing the firm to carry on the business in his premises. Nixie withdrew ₹ 1,000 at the end of the month for the first six months. Net profit of the firm for the year ending 31st March 2021 (before any interest but after rent on Pixie’s premises) was ₹ 1,21,000.

The net profit of the firm will be ______.

Options

• ₹ 1,21,000

• ₹ 1,20,640

• ₹ 1,18,640

• ₹ 96,640

Answer 1

The net profit of the firm will be ₹ 1,20,640.

Explanation:

	₹
Net Profit before any interest	1,21,000
Less: Interest on Loan: `12,000 xx 6/100 xx 6/12`	360
Net Profit	1,20,640