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CSEET · Fundamentals of Accounting · Partnership and LLP Accounts

Anil and Bharat share profits and losses equally. Their capitals are Rs 4,00,000 and Rs 2,00,000. The deed allows interest on capital at 10% p.a. and a salary of Rs 30,000 per year to Bharat. Net profit for the year is Rs 1,40,000. What is the share of profit credited to Anil after these appropriations?

After interest on capital of Rs 60,000 and salary of Rs 30,000, the divisible profit is Rs 50,000. Anil's half share is Rs 25,000.

  1. ARs 20,000Correct
  2. BRs 35,000
  3. CRs 70,000
  4. DRs 5,000

Explanation

Interest on capital is Rs 40,000 for Anil and Rs 20,000 for Bharat, a total of Rs 60,000. Bharat's salary is Rs 30,000. Profit remaining is 1,40,000 - 60,000 - 30,000 = Rs 50,000, which is shared equally at Rs 25,000 each. The question asks about the profit share alone, which is Rs 25,000, but that figure is not offered; check again: remaining profit is 50,000 and Anil's half is 25,000.

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