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P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.?
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P and Q are partners. They share profits in 2:1 ratio. As per partners...
If the profits of the partnership are 7100 instead of 10100, it will affect the distribution of profits and the amount of interest that each partner receives on their capital.
To determine the effect of the decrease in profits on the distribution of profits and the interest received by each partner, you can follow these steps:
Calculate the total profit-sharing ratio of the partnership. The total profit-sharing ratio is the sum of the profit-sharing ratios of all the partners. In this case, the total profit-sharing ratio is 2/3 + 1/3 = 3/3 = 1.
Calculate the profit share of each partner. To do this, multiply the total profits by the profit-sharing ratio of each partner. For example, the profit share of Partner P is 7100 * 2/3 = 4700. The profit share of Partner Q is 7100 * 1/3 = 2300.
Calculate the amount of interest earned by each partner on their capital. To do this, multiply the capital of each partner by the interest rate (10% per year) and divide by 100. For example, the amount of interest earned by Partner P is 5000 * 10/100 = 500. The amount of interest earned by Partner Q is 3000 * 10/100 = 300.
Calculate the total amount of profits and interest received by each partner. To do this, add the profit share and the interest earned by each partner. For example, the total amount received by Partner P is 4700 + 500 = 5200. The total amount received by Partner Q is 2300 + 300 = 2600.
From the above calculations, it is clear that the decrease in profits from 10100 to 7100 has affected the distribution of profits and the amount of interest received by each partner. Partner P has received a profit share of 4700 and an interest of 500, for a total of 5200. Partner Q has received a profit share of 2300 and an interest of 300, for a total of 2600. The total amount received by each partner is lower than it would have been if the profits had been 10100.
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P and Q are partners. They share profits in 2:1 ratio. As per partners...
Solution:
Given:
P and Q are partners, sharing profits in the ratio of 2:1. Their respective capital amounts are P: 5000 and Q: 3000. They are to receive an interest of 10% p.a. on their capital. Their profit before interest is 10100.
Calculation of Interest on Capital:
Interest on P’s capital = 5000 * 10% = 500
Interest on Q’s capital = 3000 * 10% = 300
Calculation of Profit after Interest:
Profit after interest = Profit before interest – Interest on capital
Total interest = 500 + 300 = 800
Profit after interest = 10100 – 800 = 9300
Sharing of Profit:
P’s share = (2/3) * 9300 = 6200
Q’s share = (1/3) * 9300 = 3100
Total Profit = 6200 + 3100 = 9300
Calculation of Difference in Profit:
Given profit before interest = 10100
Profit after interest = 7100
Difference in profit = 10100 – 7100 = 3000
Explanation:
As per the partnership agreement, interest on capital is allowed as a charge. Therefore, the partners need to be paid interest on their capital before the profits are divided between them. In this case, P and Q received an interest of 500 and 300 respectively on their capital.
After deducting the interest on capital from the profit before interest, the profit after interest was calculated to be 9300. This profit was then divided between the partners in the ratio of 2:1.
In case the profit before interest was reduced to 7100, the total interest paid to the partners would also be reduced to 800. This would result in a difference of 3000 in the total profit, which would be divided between P and Q in the ratio of 2:1.
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P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.?
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P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.?.
P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.?.
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P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.?, a detailed solution for P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.? has been provided alongside types of P and Q are partners. They share profits in 2:1 ratio. As per partnership they are to get interest on capital@ 10% p. a. Their capital were P :5000; Q: 3000. Their profit before interest were 10100 . Interest is allowed as a charge. What difference will it make if profit are 7100 only.? theory, EduRev gives you an
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