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4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​?
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4. A, B and C were in partnership. A and B sharing profits in the prop...
Distribution of Profit among Partners

Given Information:
- Partnership of A, B, and C
- A and B share profits in the ratio of 3:1
- C receives a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7th of the profit of the firm, whichever is larger.
- Excess of the latter over the former is charged to A.
- Profit for the year ended 31.12.2008 was Rs. 20,70,000

Calculation of C's Salary:
C's salary will be the larger of the two amounts calculated below:
- Rs. 250,000 + 5% of profit after charging his salary
- 1/7th of the profit of the firm

Let's calculate both amounts separately and choose the larger one.

- C's salary as per the first option:
- C's salary = Rs. 250,000 + 5% of (profit - Rs. 250,000)
- = Rs. 250,000 + 5% of (20,70,000 - 2,50,000)
- = Rs. 250,000 + 5% of 18,20,000
- = Rs. 250,000 + Rs. 91,000
- = Rs. 3,41,000

- C's salary as per the second option:
- C's salary = 1/7th of the profit of the firm
- = 1/7 x 20,70,000
- = Rs. 2,95,714.29 (rounded off to Rs. 2,95,714)

Therefore, C's salary will be Rs. 3,41,000 as it is larger than Rs. 2,95,714.

Calculation of A and B's Share of Profit:
A and B share profits in the ratio of 3:1. Let's calculate their share of profit.

- Total profit of the firm = Rs. 20,70,000
- C's salary = Rs. 3,41,000
- Profit after deducting C's salary = Rs. 20,70,000 - Rs. 3,41,000
- = Rs. 17,29,000
- A's share of profit = 3/4 x Rs. 17,29,000
- = Rs. 12,96,750
- B's share of profit = 1/4 x Rs. 17,29,000
- = Rs. 4,32,250

Adjustment of Excess Profit:
As per the partnership agreement, any excess of C's salary calculated as 1/7th of the profit of the firm over Rs. 3,41,000 will be charged to A.

- Excess of C's salary calculated as 1/7th of the profit of the firm:
- = Rs. 2,95,714 - Rs. 2,50,000
- = Rs. 45,714
- This excess amount will be charged to A.
- A's final share of profit = Rs. 12,96,750 - Rs. 45,714
- = Rs. 12,51,036
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4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​?
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4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​?.
Solutions for 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​? defined & explained in the simplest way possible. Besides giving the explanation of 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​?, a detailed solution for 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​? has been provided alongside types of 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​? theory, EduRev gives you an ample number of questions to practice 4. A, B and C were in partnership. A and B sharing profits in the proportion of three to one and C receiving a salary of Rs. 250,000 plus 5% of the profit after charging his salary or 1/7 of the profit of the firm whichever is the large. Any excess of the latter over the former is, under the partnership agreement, to be charged to A. The profit for the year ended 31.12. 2008 was Rs. 20,70,000. You are required to show the distribution of the profit among the partners​? tests, examples and also practice CA Foundation tests.
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