Multiple choice

L and M invest Rs 2,00,000 and Rs 1,00,000 respectively in a partnership, and agree to divide profit/loss equally after providing for interest @ 10% per annum on original capital and salaries of Rs 24,000 and Rs 48,000 respectively. How much total amount L would get if the period's net income (before interest and salaries) is Rs 1,78,000 ______________.

  1. Rs 96,000

  2. Rs 89,000

  3. Rs 82,000

  4. Nil
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Net income = 178,000. Interest: L = 20,000, M = 10,000. Salaries: L = 24,000, M = 48,000. Total appropriations = 20k+10k+24k+48k = 102,000. Remaining profit = 178,000 - 102,000 = 76,000. L's share of profit = 38,000. Total for L = 20,000 (int) + 24,000 (sal) + 38,000 (profit) = 82,000.

AI explanation

First, deduct the interest on original capitals and the salaries from the net income of 178000. L receives 20000 in interest and 24000 in salary, while M receives 10000 in interest and 48000 in salary. Deducting these total appropriations of 102000 leaves a divisible profit of 76000, which is split equally to give L an additional 38000. Adding L's interest, salary, and profit share yields a total of 82000.

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