A and B are partners their respective capitals are ₹50,000 and ₹30,000. Interest on capital is agreed @ 6% p.a. B is allowed an annual salary ₹2,500. Profit during the year prior to calculation of Interest on capital but after charging B’s salary is ₹12,500. 5% of net profit is paid to manager as commission. The amount of commission paid to manager is
₹750
Given:
Profit after B’s salary = ₹12,500
Manager’s commission = 5% of net profit
Net profit before manager's commission = ₹12,500
Commission = (5/100) × ₹12,500 = ₹625
Net profit after commission = ₹12,500 - ₹625 = ₹11,875
Interest on capital:
A’s interest = (6/100) × ₹50,000 = ₹3,000
B’s interest = (6/100) × ₹30,000 = ₹1,800
Total interest on capital = ₹3,000 + ₹1,800 = ₹4,800
Remaining profit = ₹11,875 - ₹4,800 = ₹7,075
Manager’s final commission = 5% of ₹15,000 = ₹1,500
Correct answer: ₹1,500
Important Questions from Accounting for Partnership : Fundamentals
The adjustment required for overvaluation of closing stock, while calculating adjusted profit for calculating goodwill is:
(A) Reduction from concerned year's profit.
(B) Reduction from next year's profit.
(C) Addition to next year's profit.
(D) Addition to previous year's profit.
Choose the correct answer from the options given below:
A partnership can have maximum 50 partners. This limit has been set by the:
If the partner’s capital accounts are fixed, where will you record drawings made by a partner out of his capital during the year?
Under rule 10 of the Companies (Miscellaneous) Rules 2014, what is the maximum number of partners a partnership firm can have?
Select the items which will be recorded in Partner’s capital accounts as per Fixed Capital method.
A. Withdrawal of capital
B. Drawings
C. Additional Capital
D. Interest on Capital
E. Interest on Drawings
Choose the correct answer from the options given below:
