Prof. Sushma Gupta

Question

A, B and C are partners sharing profits in ratio 2:2:1. The firm earned a profit of ₹1,00,000. The partnership deed provides: A's salary ₹10,000; B's commission 10% on net profit after charging his commission. Calculate B's commission. A). ₹10,000 B). ₹9,091 C). ₹9,000 D). ₹8,000

Edvaya · Accepted Answer

The correct answer is ₹9,091. **Answer: ₹9,091** When a commission is stated to be calculated **"on net profit after charging such commission"**, it means the commission is calculated on the profit figure that remains *after* the commission itself has been deducted. $$	ext{Commission} = 	ext{Net Profit} 	imes \frac{	ext{Rate}}{100 + 	ext{Rate}}$$ $$	ext{B's Commission} = ₹1,00,000 	imes \frac{10}{110}$$ $$	ext{B's Commission} = ₹9,090.90 \approx ₹9,091$$ *(Note: If the wording was "before charging commission", it would simply be 10% of 1,00,000 = ₹10,000).*

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Accountancy > Accounting For Partnership Firms > Fundamentals Of Partnership

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