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A and B share profits in the ratio 3:1. A receives commission at 15% of total profit and then receives a share of the balance in the profit ratio. Total profit is ₹1,20,000. What is A’s total share?

Answer and explanation

Correct answer: ₹94,500

The governing concept is appropriation of profit: a commission specified on total profit is calculated first, and the remaining profit is then distributed in the agreed ratio. A’s commission is 15% of ₹1,20,000, which equals ₹18,000. The residual profit is ₹1,20,000 − ₹18,000 = ₹1,02,000. Since A and B share this balance in the ratio 3:1, A receives 3/4 of it, or ₹1,02,000 × 3/4 = ₹76,500. A’s total share is therefore commission plus residual share: ₹18,000 + ₹76,500 = ₹94,500. Thus option A is correct. Option C excludes the commission, while B and D do not apply both the commission and the stated ratio correctly.

Related tags

PartnershipCommissionProfit DistributionAccountancyClass 12 McqProfit DistributionPartnership Accounts Basic Concepts

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