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A, B and C share profits in the ratio 3:7:5. Total profit is Rs 375000. B receives a salary of Rs 60000 paid before profit distribution. What is A's share after the salary is deducted?

Answer and explanation

Correct answer: Rs 63000

Deduct B's fixed salary first: Rs 375000 − Rs 60000 = Rs 315000 remaining. Total ratio = 3+7+5 = 15. A's share = \(\frac{3}{15}\) of remaining = \(\frac{3}{15}\times 315000 = 63000\). Option B is incorrect because it equals \(\frac{3}{15}\) of the total profit without deducting B's salary (\(\frac{3}{15}\times 375000 = 75000\)). Exam tip: always deduct guaranteed payments (salary, interest) before distributing the residual profit by ratio.

Related tags

Partnership AccountsProfit DistributionSalaryRatioAccountancyPartnership Accounts Basic ConceptsClass 12 Mcq

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