Adjustments

Correct answer: A. No because B's normal share is (₹80000)

B's normal share is (120000\times\frac{2}{3}=₹80000), which is more than the guarantee. So there is no deficiency.

Correct answer: A. ₹50,000

B’s salary of ₹30,000 is an appropriation of profit, so it must first be deducted from the total profit: ₹1,10,000 − ₹30,000 = ₹80,000. This residual profit is shared in the ratio 5:3. Therefore, A’s share is \(₹80,000 \times \frac{5}{8} = ₹50,000\). ₹68,750 would result from sharing the entire profit directly in the ratio 5:3 without adjusting B’s salary. Exam tip: deduct the partner’s salary before applying the residual profit-sharing ratio.

Correct answer: A. (₹13000)

The phrase “10% commission on profit before commission” means that the commission is calculated on the profit after deducting the partner’s salary but before deducting the commission itself. The salary is therefore removed first. This is different from commission on profit after commission, which would require a different denominator and calculation.

The original profit is ₹150,000. After deducting A’s salary of ₹20,000, the profit available as the commission base is ₹130,000. Ten percent of this amount is calculated as \\(130000 \\times 10/100 = ₹13000\\). Thus A’s commission is ₹13,000, so option A is correct. The amount ₹15,000 would result from applying 10% to the original profit without first deducting salary.

Correct answer: A. Read the order of instruction before deciding commission base

The direct answer is option A: read the order of the instructions before deciding the commission base. In partnership problems, words such as 'on net profit', 'before commission', 'after commission', 'after salary', or 'after other adjustments' control the calculation. First identify the profit figure to which the stated percentage applies, then make the adjustments in the specified order. Option A is correct because the sequence can change the base and therefore the answer. Option B is wrong because commission on net profit is not automatically commission on gross profit. Option C is wrong because commission is not zero unless the question says so. Option D is wrong because commission is an appropriation or expense-related adjustment, not a partner's drawings. A common trap is calculating a percentage before reading whether another adjustment must be made first. Exam cue: underline 'before' and 'after' before calculating.

Correct answer: A. (₹8000) from A to B

Without interest, profit was overdistributed by (₹30000), giving A (₹20000) and B (₹10000). Correct interest gives B (₹18000), so A transfers (₹8000) to B.

Correct answer: A. B should be reduced by (₹2000)

Wrong interest on capital allowed was (₹5000), while correct loan interest at (6%) is (₹3000). So B's credit is reduced by (₹2000).

Correct answer: A. Credit A (₹8000)

Interest was already charged to A, only addition to profit is missing. On adding it, A gets credit (10000\times\frac{4}{5}=₹8000).

Correct answer: A. A's share increases by (₹20000)

Removing the extra salary debit increases distributable profit by (₹40000). In equal ratio A gets (₹20000) more.