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Interest on capital due to A and B is ₹24000 and ₹16000 respectively. Available profit is only ₹30000 and there are no other appropriations. How much interest will be allowed to B?

Answer and explanation

Correct answer: ₹12000

The direct answer is option A: B will be allowed ₹12000. The stated interest amounts are ₹24000 for A and ₹16000 for B, so the total intended interest is ₹40000. However, the available profit is only ₹30000. Since there is no other appropriation, the available amount is distributed in the ratio of the amounts due: A:B = 24000:16000 = 3:2. B's share is therefore ₹30000 × 2/5 = ₹12000, equivalently \\(30000 \\times \\frac{16000}{40000}=12000\\). Option A is correct. Option B wrongly gives B the full amount despite insufficient profit. Option C divides profit equally, although the due amounts are unequal. Option D uses an unsupported figure and does not follow the ratio. Exam cue: when profit is insufficient for appropriations, distribute it proportionately unless the applicable rule says otherwise.

Related tags

PartnershipInterest On CapitalInsufficient Profit

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