X and Y are partners sharing profits equally. Z was manager and received the salary of ₹8,000 p.m in addition to commission of 5% on net profit before charging such commission. Profit for the year is ₹12,00,000 before charging salary. Find the total remuneration of Z.

₹1,51,200

The correct answer is option 4- ₹1,51,200.

Salary per month = ₹8,000
Total salary = 8000 X 12
                  = ₹96,000

*Salary of manager is a charge against profit so it is debited to profit and loss account.

Net profit  = 12,00,000 -  SALARY
                 = 12,00,000 - 96,000
                 = 11,04,000

Commission = (Net profit X rate of commission) / 100
Commission of Z =11,04,000 X 5/100
                           = ₹55,200

Total remuneration of Z = Salary + Commission
                                      =  96,000 + 55,200
                                      = 1,51,200