Question

$X,Y$ and $Z$ are partners sharing profits and losses equally. As per Partnership Deed, $Z$ is entitled to a commission of 10% on the net profit after charging such commission. The net profit before charging commission is Rs. 2,20,000. Determine the amount of commission payable to Z.

Answer 1

Net Profit before charging commission= 220000

Rate of commission= 10% of net profit after charging such commission

B's commission= [Rate/(100+Rate)]* Net profit

= [10/(100+10)] * 220000

= 20000