A and B share profits in the ratio of 3:2. Profit before appropriation is Rs. 120,000. Interest on A's capital is Rs. 10,000, and A receives a salary of Rs. 20,000. What amount is credited to A as his share of the remaining profit?
Correct answer: B. Rs. 54,000
- A. Rs. 36,000
- B. Rs. 54,000
- C. Rs. 60,000
- D. Rs. 84,000
Explanation
After deducting interest and salary of Rs. 30,000, the remaining profit is Rs. 90,000. A receives 3/5 of this amount, which is Rs. 54,000. His total credit would be higher after adding salary and interest.
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About Partnership Accounts
Partnership accounts cover the partnership agreement, capital and current accounts, profit and loss appropriation, salaries, interest on capital, interest on drawings and profit-sharing ratios. They also address changes in partnership, including admission, retirement, goodwill, revaluation, dissolution and the settlement of partners’ balances.
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