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Tom and Harry...

Question

Tom and Harry are partners sharing profits and losses in a ratio of 5 : 4. The net profit for the year is ₹2,40,000 before any appropriations. Tom is entitled for a salary of ₹20,000 p.a, and Harry is entitled for a commission at 5% of the net profit after charging salary and commission. Calculate the amount of commission.

[0.88 marks]

A

₹12,000

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B

₹11,000

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C

₹10,476

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D

₹11,429

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Solution

The correct option is C ₹10,476
Commission = $(2, 40, 000 - 20, 0000) \times \frac{5}{105}$
= ₹10,476

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