A and B are partners sharing profits in the ratio 3:2 with capitals of ₹1,00,000 and ₹50,000 respectively. Interest on capital is agreed at 10% p.a. B will be entitled to get an annual salary of ₹7,000. Net Profit for the year was of ₹60,000. Divisible Profit to A and B is -
Answer & explanation
Correct answer: option 1
The correct answer is option 1- A- ₹22,800 B - ₹15,200.
Interest on Capital -
A = 1,00,000 x 10/100
= 10,000
B = 50,000 * 10/100
= 5,000
Total interest = 10,000 + 5,000
= 15,000
B's salary = 7,000
Divisible Profit = Net profit - Interest on capital - Salary
= 60,000 - 15,000 -7,000
= 38,000
A's share in profit = 38,000 * 3/5
= ₹22,800
B's share in profit = 38,000 * 2/5
= ₹15,200