Profit Distribution

After deducting salary and interest on capital remaining profit is eighty thousand. B three eighth share is thirty thousand rupees.

Interest on capital is an appropriation limited to available profit. If profit is lower interest is allowed proportionately up to thirty four thousand.

The special clause makes salary a charge. Adding salary forty two thousand to loss eighteen thousand gives total loss sixty thousand rupees.

C is excluded from loss so A and B share loss in six to three which is two to one. B one third share is thirty thousand rupees.

Profit for first eight months is eighty thousand and B gets forty thousand. Profit for last four months is forty thousand and B gets two fifths which is sixteen thousand total fifty six thousand.

In first eight months A gets forty thousand. In last four months A gets three fifths of forty thousand which is twenty four thousand so total is sixty four thousand.

Distributable profit is ninety thousand plus six thousand minus twenty four thousand minus twelve thousand equal to sixty thousand. B one third share is twenty thousand rupees.

Loan interest is a charge against profit and was already deducted while finding net profit. Deducting it again in appropriation understates profit.

A actual share is forty five thousand so deficiency is ten thousand. B actual share was sixty thousand and after bearing deficiency it becomes fifty thousand.

The direct answer is option A: ₹15,000. There are two separate commissions. Sales commission = 5% of sales = 5/100 × ₹200,000 = ₹10,000. The question explicitly says that the profit commission is calculated on profit before commission. Therefore profit commission = 10% of ₹50,000 = ₹5,000. Total commission = sales commission + profit commission = ₹10,000 + ₹5,000 = ₹15,000. Option A is correct. Option B, ₹10,000, counts only the sales commission and leaves out the profit commission. Option C, ₹20,000, overstates the total and does not follow either stated percentage calculation. Option D, ₹5,000, counts only the profit commission and leaves out the sales commission. The phrase “before commission basis” is important: it means we use the given ₹50,000 directly, rather than trying to calculate commission on a reduced profit or solving a denominator formula. Always calculate each commission separately, then add them. Memory cue: sales percentage uses sales; profit percentage uses the stated profit base.

After salary the base is eighty five thousand. Since commission is after charging commission eighty five thousand times ten divided by one hundred ten is about seven thousand seven hundred twenty seven.

After deducting reserve first profit left is thirty thousand. Interest on capital as normal appropriation is allowed only up to available amount.

Interest on drawings is charged to partners because they have used firm funds for personal purposes. For the firm, this interest is income, so it is credited in the profit and loss appropriation account. Adding it increases the amount of profit available for distribution among partners. If the amount is omitted, the recorded distributable profit becomes smaller than the amount that should have been available.

Here the omitted interest is ₹7,000. Therefore, the distributable profit is understated by ₹7,000. It is not an increase in salary and it is not a zero effect, because a real credit item has been left out. The statement that profit is overstated would reverse the direction of the error: omission of income causes an understatement, not an overstatement.

After deducting salary remaining profit is one lakh. C gets five tenths which is fifty thousand plus salary ten thousand so total is sixty thousand.

A actual total benefit is fifteen thousand plus twenty thousand which is thirty five thousand. Guarantee is forty five thousand so deficiency is ten thousand.

B actual share is fifteen thousand so deficiency is five thousand. A sixty thousand share is reduced by five thousand so final profit is fifty five thousand.

A commission is twelve thousand and remaining profit is one lakh eight thousand. B bonus at twenty percent is twenty one thousand six hundred rupees.

The governing concept is a bonus calculated after charging the bonus itself. When the stated rate is 20%, the amount of bonus is not found by simply taking 20% of the original profit, because the bonus reduces the base on which it is calculated. The applicable formula is Bonus = profit before bonus × rate/(100 + rate). Substituting the figures gives Bonus = Rs 96,000 × 20/120 = Rs 16,000. Verification confirms the result: Rs 96,000 − Rs 16,000 = Rs 80,000, and 20% of Rs 80,000 is Rs 16,000. Thus option A is correct. Option B is the direct 20% calculation on the original profit, option C has no valid basis, and option D understates the amount.

Reserve should have been debited but was credited. Difference from correct position is double which is twenty thousand rupees.

A share of loss after appropriations is fifteen thousand debit and salary is fifteen thousand credit. Both cancel so net effect is zero.

Remaining profit is eighty thousand plus five thousand minus twenty five thousand minus fifteen thousand equal to forty five thousand. A five ninth share is twenty five thousand.

A actual share is fifteen thousand so deficiency is fifteen thousand. B and C bear it in two to three so C deduction is nine thousand.

B actual share is thirty thousand and B share of A deficiency is six thousand. Therefore B final profit is twenty four thousand rupees.

Total salary is sixty thousand but profit is only forty thousand. In equal proportion each gets twenty thousand.

Salary ratio is forty thousand to twenty thousand which is two to one. A gets two thirds of thirty thousand which is twenty thousand.