Question 25 Chapter 2 of Class 12 Part – 1 Usha Publication

Question 25 Chapter 2 of Class 12 Part – 1 Usha Publication

25. (Interest is a charge) P and Q are partners. They share profits in 2:1 ratio. As per the partnership, they are to get interested on capital @10% p.a. Their capitals were P- Rs.50,000; Q- Rs.30,000. Their profit before interest was Rs.10,100. Interest is allowed as a charge. What difference will it make if profits are Rs.7,100 only?

The solution of Question 25 Chapter 2 of Class 12 Part – 1 Usha Publication: -

We are providing a solution of Question 25 Chapter 2 of Class 12 Part - 1 Usha Publication in two formats. one is in Video format and another is in article format. Check out both formats as follows:

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The video consists solution of questions numbers 18 to 28 Chapter No. 2 class 12 of Usha publication. To check the direct solution of question no. 25 from the following video by using time stamps of the video.

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2. Check out the Solution of this question in Article Format: -

Calculation of net profit

Particulars		B
	a) If profits are Rs.10,100:
	Profit before interest		10,100
	Less: Interest on Capital @ 10% - A		(5,000)
	Interest on Capital @ 10% - B		(3,000)
Net Profit		2,100

Calculation of distribution of profit

Particulars		A	B
	Net Profit of Rs.2,100 being distributed in 2:1 ratio		1,400	700

Calculation of net profit

Particulars		B
	a) If profits are Rs7,100:
	Profit before interest		7,100
	Less: Interest on Capital @ 10% - A		(5,000)
	Interest on Capital @ 10% - B		(3,000)
Net Profit		900

Calculation of distribution of profit

Particulars		A	B
	Net loss of Rs.900 being distributed in 2:1 ratio		(600)	(300)

Note: When interest is allowed as charge, it is irrespective of the quantum of profits and is shown in Profit and Loss a/c.