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A receives a salary of Rs 30,000 and B receives a commission equal to 10% of the net profit after deducting the salary. Profit before deducting the salary is Rs 1,80,000. What is B's commission?

Answer and explanation

Correct answer: Rs 15000

Total profit before salary = Rs 1,80,000. Deduct A's salary of Rs 30,000 first: net profit = Rs 1,80,000 − Rs 30,000 = Rs 1,50,000. B's commission = 10% of net profit = 10% of Rs 1,50,000 = Rs 15,000. The common wrong choice Rs 18,000 comes from mistakenly taking 10% of the profit before deducting salary. Exam tip: always deduct fixed items (salaries, guaranteed payments) before applying percentage-based commissions or profit-related shares.

Related tags

SalaryCommissionNet ProfitPartnership AccountsProfit DistributionPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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