Profit Distribution

First appropriations and adjustments are made. At the end remaining profit or loss is shared in the given ratio.

A monthly salary is earned once in each of the twelve months of a normal accounting year. Therefore, the annual salary is calculated by multiplying the monthly amount by 12: Rs 4,000 × 12 = Rs 48,000. The calculation assumes that the salary is payable for the complete year and that there is no unpaid period, bonus, or change in the monthly rate. Option B is only one month’s salary, while option C represents six months. Option D incorrectly adds an extra month to the twelve-month total. Since the question asks for the salary for the whole year, option A, Rs 48,000, is the only correct answer.

The governing concept is that profit is divided according to the agreed profit-sharing ratio, not automatically according to capital contribution. The ratio 4:1 contains 4 + 1 = 5 total parts. A is entitled to four parts, so A’s share is 4/5 × Rs 50,000 = Rs 40,000. B receives the remaining one-fifth, or Rs 10,000, and both amounts total the full Rs 50,000. Equal capitals do not make the profit ratio equal when the partnership agreement expressly specifies 4:1. Thus option A is correct. Option B incorrectly assumes equal division, option C gives B’s share, and option D assigns the entire profit to A without contractual support.

The governing concept is finding a combined share from a profit-sharing ratio. In the ratio 2:2:1, the total number of parts is 2+2+1=5. A receives 2 parts and B receives 2 parts, so together they receive 4 parts. Their combined amount is therefore 4/5×Rs 75,000 = Rs 60,000. C receives the remaining 1/5, equal to Rs 15,000, and the two amounts total Rs 75,000. Hence option A is correct. Option B is not the combined entitlement, option C is C’s individual share, and option D assigns the entire profit to A and B while ignoring C’s agreed share. The ratio must be applied to the whole profit.

The governing concept is that partners distribute a loss in the agreed ratio, just as they distribute profit. The ratio 1:2:3 contains 1+2+3=6 total parts, and C is responsible for 3 parts. Therefore C’s share is 3/6×Rs 48,000 = Rs 24,000. A’s share is Rs 8,000 and B’s share is Rs 16,000; together with C’s Rs 24,000, the total loss is Rs 48,000. Thus option A is correct. Option B is A’s share, option C is B’s share, and option D assigns the entire loss to C, contrary to the agreed ratio. The calculation concerns the amount borne by C, not the remaining loss.

The governing concept is that specified appropriations are deducted from the profit before the balance is distributed among partners. Assuming the question intends both the partner’s salary and the transfer to general reserve to be appropriated from the stated net profit, first deduct the salary: Rs 85,000 − Rs 15,000 = Rs 70,000. Then deduct the reserve: Rs 70,000 − Rs 10,000 = Rs 60,000. Equivalently, total deductions are Rs 25,000 and Rs 85,000 − Rs 25,000 = Rs 60,000. Option B ignores the reserve, option C uses an incorrect deduction, and option D adds the amounts. Hence option A is correct.

The governing concept is distribution of partnership profit according to the agreed profit-sharing ratio. The total ratio is 5 + 2 = 7 parts, of which A is entitled to 5 parts. Therefore, A’s share is calculated as Rs 70,000 × 5/7 = Rs 10,000 × 5 = Rs 50,000. As a check, B’s share is Rs 70,000 × 2/7 = Rs 20,000, and the two shares together equal Rs 70,000. Option B is B’s share, not A’s share. Option C would result from an incorrect equal division, while option D assigns the entire profit to A and ignores B’s entitlement. Hence, option A is correct.

Interest on drawings is income earned by the firm because partners have used firm funds for personal purposes. It is credited to the firm’s Profit and Loss Appropriation Account and generally debited to the concerned partners’ accounts. If this interest is omitted before profit distribution, the firm’s appropriable income is understated by the amount that should have been credited. Consequently, the amount available for distribution appears lower and partners may receive incorrect profit shares. The firm’s income does not become higher, partner capital does not automatically remain fixed, and loan interest is unrelated to this omission. Therefore option A states the first direct effect.

Salary and commission specified in the partnership arrangement are appropriations of profit made before the residual profit is distributed between the partners. The total amount to be appropriated first is ₹12,000 + ₹6,000 = ₹18,000. Subtracting this from the net profit gives the remaining distributable profit: ₹90,000 − ₹18,000 = ₹72,000. The 3:2 ratio is relevant for dividing this residual amount, but it is not needed to find the total remaining profit. Option B subtracts only one adjustment, option C uses an incorrect deduction, and option D ignores both adjustments. Hence option A is correct.