35 :- X and Y are partners in a firm. X is entitled to a salary of Rs 10,000 per month and a commission of 10% of the net profit after the partner’s salaries but before charging the commission. Y is entitled to a salary of Rs 25,000 p.a. and a commission of 10% of the net profit after charging all commission and partner’s salaries. Net Profit before providing for partner’s salaries and commission for the year ended 31st March, 2025 was Rs 4,20,000. Show distribution of profit.
Solution :- Calculation of X’s commission
X’s commission =( Net profit – partner’s salaries ) x 10%
= (4,20,000 – (10,000 x 12) – 25,000) x 10 %
= 2,75,000 x 10/100
= Rs 27,500
Calculation of Y’s commission
Y’s commission = (net profit – partner’s salaries – X’s commission) x 10/110
= (4,20,000 – 1,20,000 – 25,000 – 27,500) x 10/110
= 2,47,500 x 10/110
= Rs 22,500
Distribution of profits
Distributable profit = net profit – partner’s salaries – partner’s commission
= 4,20,000 – 1,45,000 – 50,000
= Rs 2,25,000
X’s share of profit = 2,25,000 x 1/2 = Rs 1,12,500
Y’s share of profit = 225000 x ½ = Rs 1,12,500