Multiple choice

A and B are partners sharing profits and losses in the ratio of 3 : 2 having the capital of Rs. 80,000 and Rs. 50,000 respectively. They are entitled to 9% p.a. interest on capital before distributing the profits. During the year firm earned Rs. 7,800 after allowing interest on capital. Profits apportioned among A and B are Rs.

  1. 4,680 and 3,120

  2. 4,800 and 3,000

  3. 5,000 and 2,800

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Interest on capital: A = 80000 * 0.09 = 7200, B = 50000 * 0.09 = 4500. Total interest = 11700. The firm earned 7800 after interest, so there is no profit to distribute. The question implies the 7800 is the profit to be shared. 7800 * 3/5 = 4680, 7800 * 2/5 = 3120.

AI explanation

The available profit of Rs. 7,800 is distributed in the profit sharing ratio of 3 : 2. The total ratio parts equal 5, making A's share 3 divided by 5 times 7800, which is Rs. 4,680. B's share is 2 divided by 5 times 7800, which is Rs. 3,120.

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