Profit Distribution

B actual share is sixty thousand and deficiency is ten thousand. C bears five thousand from his one lakh share so C final profit is ninety five thousand.

C actual share is thirty thousand so deficiency is ten thousand. A actual share was forty five thousand and after bearing half deficiency five thousand A gets forty thousand.

The direct answer is option A: A ₹40,000, B ₹40,000, and C ₹40,000. First divide the total profit of ₹120,000 in the ratio 3:3:2. Total parts = 3 + 3 + 2 = 8, so one part = ₹120,000 ÷ 8 = ₹15,000. The original shares are A = 3 × ₹15,000 = ₹45,000, B = ₹45,000, and C = 2 × ₹15,000 = ₹30,000. C is guaranteed ₹40,000, so C has a deficiency of ₹40,000 − ₹30,000 = ₹10,000. A and B bear this deficiency equally, so each bears ₹5,000. Adjusted shares are A ₹45,000 − ₹5,000 = ₹40,000; B ₹45,000 − ₹5,000 = ₹40,000; C ₹30,000 + ₹10,000 = ₹40,000. Option A is therefore correct. Option B gives C only ₹30,000, ignoring the guarantee. Option C gives A and B unequal deficiency burdens even though the question says equally. Option D similarly gives an unequal burden. Check: ₹40,000 + ₹40,000 + ₹40,000 = ₹120,000.

The special clause makes salary a charge against profit. Adding salary thirty six thousand to existing loss twenty thousand makes total loss fifty six thousand.

Partner salary is generally appropriation of profit not expense. Wrong classification understates net profit and misstates appropriation account.

Normally interest on capital is appropriation and cannot exceed profit. So interest is allowed up to thirty thousand and remaining profit is zero.

The direct answer is A: interest on drawings is an amount receivable by the firm from the partner. Drawings are personal withdrawals made by a partner. Because the partner uses firm money for personal purposes, the firm charges interest; this interest is income for the firm. In the Profit and Loss Appropriation Account, interest on drawings is therefore shown on the credit side. Option A is correct. Option B is wrong because the firm is not paying this interest to the partner; the partner pays it to the firm. Option C is wrong because it is not an ordinary operating expense such as rent or wages. Option D is wrong because interest on a loan is charged on borrowed money received by the firm, whereas drawings are money withdrawn by a partner. Exam cue: interest on drawings benefits the firm, so it is credited.

Normally, a partner’s salary is allowed only when the partnership deed provides for it. A special clause may state that the salary must be paid even when the firm has no profit or has suffered a loss. In that situation, the amount has to be borne despite the unfavourable result and can make the firm’s reported loss larger.

Option A expresses this condition: the deed makes salary payable irrespective of profit or loss. If the firm already has a loss and an additional amount is charged under the stated agreement, the loss increases by that amount. A silent deed does not automatically create this right, and interest on drawings is a separate adjustment. Therefore, option A is the intended correct choice.

If reserve were created first distributable profit would be lower. Creating it later may overstate profit share.

A actual share is twenty four thousand so deficiency is six thousand. B actual share was sixteen thousand and after deduction it becomes ten thousand.

After salary remaining profit is thirty five thousand and C one fifth share is seven thousand. C total benefit is fifteen thousand plus seven thousand which is twenty two thousand.

Net profit comes from business while interest on drawings is recovery from partner. Both are credited but sources differ.

Distributable profit is sixty four thousand plus four thousand minus eight thousand equal to sixty thousand. B five eighth share is thirty seven thousand five hundred.

Subtract A's salary from total profit first: ₹60,000 − ₹10,000 = ₹50,000. The question states B's commission is 10% of the profit after salary, so commission = 10% of ₹50,000 = ₹5,000. Why other options are wrong: ₹6,000 would be 10% of ₹60,000 (ignoring the salary deduction). Exam tip: always deduct fixed appropriations (salaries, guarantees) before calculating percentage-based appropriations like commission, and check the stated base for the percentage.

The governing concept is commission calculated after charging the commission itself. Let P denote profit before this commission, C denote the commission, and r denote the rate in percent. Since the commission is based on profit remaining after deducting C, the relationship is C = r/100 × (P − C). Multiplying by 100 and rearranging gives 100C = rP − rC, so C(100 + r) = rP. Consequently, C = P × r/(100 + r), which is the formula in option A. Option B, P × r/100, applies when commission is calculated before charging commission. Options C and D do not express a valid percentage relationship and generally give incorrect amounts. Therefore option A is correct.

The direct answer is A: commission before charging commission equals profit × rate ÷ 100. If profit before commission is P and the rate is r%, then commission is P × r/100. For example, on Rs 70000 at 10%, commission is Rs 70000 × 10/100 = Rs 7000. Option A is correct because the entire stated profit is the base. Option B, profit × rate/(100 + rate), is the formula when commission is calculated after charging commission, not before it. Option C, profit × 100/rate, reverses the percentage operation and produces an excessive amount. Option D, profit minus rate, subtracts a percentage number from a rupee amount and is dimensionally and conceptually wrong. Remember the wording: “before” uses rate/100 directly; “after” uses rate/(100 + rate).

C actual share is twenty thousand so deficiency is ten thousand. A and B bear equally so five thousand is deducted from A forty thousand.

Guarantee is meant to make good deficiency not deduct it from guaranteed partner. Deficiency is borne by guarantor.

Profit for second six months is thirty three thousand. In new ratio two to one A gets two thirds which is twenty two thousand.

When ratio changes split profit by time if profit is stated to accrue evenly. Apply each periods ratio separately.

Correct sequence reduces mistakes in salary interest reserve commission and guarantee. Finally distribute the remaining amount in correct ratio.

Distributable profit is two lakh forty thousand plus twelve thousand minus forty thousand minus thirty thousand minus twenty two thousand which is one lakh sixty thousand. C share is one sixth about twenty six thousand six hundred sixty seven rupees.

For commission after charging commission use profit times rate divided by one hundred plus rate. One lakh fifteen thousand times fifteen divided by one hundred fifteen equals fifteen thousand.

Before charging commission the full given profit is the base. Twelve percent of one lakh twenty five thousand is fifteen thousand rupees.

B actual share is sixty thousand so deficiency is twenty thousand. C bears ten thousand from his sixty thousand share so final profit is fifty thousand.