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A and B are partners. The net divisible profit as per Profit and Loss Appropriation A/c is Rs. 2,50,000. The total interest on partner’s drawings is Rs. 4,000. A’s salary is Rs. 4,000 per quarter and B’ s salary is Rs. 40,000 per annum. Calculate the net profit / loss earned during the year. (C.B.S.E. Sample Paper, 2017)

SOLUTION

Net profit During the Year = Divisible profit + Salary to partners – Interest on Drawings
= 2,50,000 +16,000 + 40,000 – 4,000
= Rs. 3,02,000

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