P and q are partner this year profit in 2 ratio 1 ratio as per partner...
Partnership Profit and Interest Calculation
Given:
Partner P's capital = Rs. 50,000
Partner Q's capital = Rs. 30,000
Profit before interest = Rs. 10,100
Profit sharing ratio = 2:1
Interest on capital @ 10% per annum is allowed as a charge.
Profit after interest = Rs. 7,100
Calculation of Profit before Interest
Total capital = P's capital + Q's capital = 50,000 + 30,000 = Rs. 80,000
Let the profit be x.
According to partnership agreement, profit sharing ratio = 2:1
So, the profit will be divided as follows:
Partner P's share = 2/3 * x
Partner Q's share = 1/3 * x
2/3 * x / 50,000 = 1/3 * x / 30,000
Solving this equation, we get x = Rs. 10,100
Calculation of Interest on Capital
Interest on Partner P's capital = 10% of 50,000 = Rs. 5,000
Interest on Partner Q's capital = 10% of 30,000 = Rs. 3,000
Calculation of Profit after Interest
Total interest = Interest on P's capital + Interest on Q's capital = Rs. 5,000 + Rs. 3,000 = Rs. 8,000
Profit after interest = Profit before interest - Total interest
Profit after interest = Rs. 10,100 - Rs. 8,000 = Rs. 2,100
Impact of Profit after Interest of Rs. 7,100
If the profit after interest is Rs. 7,100, then:
Total interest = Profit before interest - Profit after interest
Total interest = Rs. 10,100 - Rs. 7,100 = Rs. 3,000
Conclusion
If the profit after interest is reduced from Rs. 2,100 to Rs. 7,100, then the total interest chargeable to the partners will increase from Rs. 8,000 to Rs. 3,000. This means that the partners will have to bear an additional interest cost of Rs. 5,000.