Question

Ravi and Kishan are partners sharing profits in the ratio of 3 : 2. Their fixed capitals on 1st April 2023 were ₹ 2,00,000 and ₹ 1,00,000 respectively. The partnership deed provides that: Interest on capital is to be allowed at 6% p.a. and charged on drawings @ 10% p.a. Ravi was to be paid a salary of ₹ 5,000 p.m., whereas Kishan was to get a commission of 4% on sales. It is ascertained that Ravi withdrew ₹ 4,000 at the end of every month and Kishan withdrew ₹ 12,000 at the end of every quarter. Sales for the year ended 31st March 2024 amounted to ₹ 3,00,000. The net profit of the firm before making the above adjustments was ₹ 56,000.

Share of profit will be:

Options

• Ravi ₹ 44,800 and Kishan ₹ 11,200

• Ravi ₹ 48,000 and Kishan ₹ 12,000

• Ravi ₹ 36,000 and Kishan ₹ 24,000

• Ravi ₹ 72,000 and Kishan ₹ 18,000

Answer 1

Ravi ₹ 48,000 and Kishan ₹ 12,000

Explanation:

Calculate Interest on Capital:

Interest on Ravi’s capital = `2,00,000 xx 6/100`

= ₹ 12,000

Interest on Kishan’s capital = `1,00,000 xx 6/100`

= ₹ 6,000

Particulars	Ravi (₹)	Kishan (₹)
Interest on capital	12,000	6,000
Salary	60,000	-
Commission	-	12,000
	72,000	18,000

Total amount to be paid = 72,000 + 18,000

= ₹ 90,000

The profits available are ₹ 56,000 + ₹ 4,000 (Interest on drawings) = ₹ 60,000, which is less than appropriations of ₹ 90,000. The profit will be divided in the ratio of 72,000 : 18,000 or 4 : 1.

Ravi’s share = `60,000 xx 4/5`

= ₹ 48,000

Kishan’s share = `60,000 xx 1/5`

= ₹ 12,000