Question

Rani and Sakhi are partners with capitals of ₹ 4,00,000 and ₹ 1,00,000, respectively. They are entitled to interest on their capitals @ 10% p.a. In addition, Rani is entitled to a salary of ₹ 4,000 per month, and Sakhi is entitled to rent of ₹ 5,000 per month for use of her office by the firm. Net profit for the year was ₹ 2,00,000. Rani’s share of profit will be ______.

Options

• ₹ 46,000

• ₹ 21,000

• ₹ 51,000

• ₹ 1,00,000

Answer 1

Rani and Sakhi are partners with capitals of ₹ 4,00,000 and ₹ 1,00,000, respectively. They are entitled to interest on their capitals @ 10% p.a. In addition, Rani is entitled to a salary of ₹ 4,000 per month, and Sakhi is entitled to rent of ₹ 5,000 per month for use of her office by the firm. Net profit for the year was ₹ 2,00,000. Rani’s share of profit will be ₹ 51,000.

Explanation:

Interest on Rani’s capital = `4,00,000 xx 10/100`

= ₹ 40,000

Interest on Sakhi’s capital = `1,00,000 xx 10 /100`

= ₹ 10,000

Rani’s annual salary = 4,000 × 12

= ₹ 48,000

Dr.	Profit and Loss Appropriation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Interest on Capital:		50,000	By Profit and Loss A/c		2,00,000
Rani	40,000
Sakhi	10,000
To Rani’s salary A/c		48,000
To Profit transferred to:		1,02,000
Rani’s Capital A/c	51,000
Sakhi’s Capital A/c	51,000
		2,00,000			2,00,000