A and B are partners A's capital is Rs. 10,000 and B's capital is Rs. 6,000. Interest on capital is payable @ 6% p.a. B is entitled to a salary of Rs. 300 per month. Profit to the year before interest and salary to B is Rs. 8,000. Profits between A and B will be divided:

Rs. 1,720 to A and Rs.1,720 to B

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Rs. 2000 to A and Rs.1440 to B

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Rs. 1440 to A and Rs.2000 to B

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None

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Solution

The correct option is A Rs. 1,720 to A and Rs.1,720 to B
Profit after interest and remuneration :-
= Profit before interest and remuneration - Interest - remuneration
= Rs-8,000 - (600 + 360) - (3,600)
= Rs-3,440.

Distributing profit is equal ratio among partners = Rs-3,440 / 2
= Rs-1,720 to each partner.
Working notes:-
Interest on capital = Capital x rate of interest
A:-
= 10,000 x 6/100
= Rs-600
B:-
= 6,000 x 6/100
= Rs-360.
B's remuneration = Rs-300 x 12
= Rs-3,600

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