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A, B and C are partners sharing profits and losses in the ratio of 2: 2: 1 respectively. A is entitled to a commission of 10% on the net profit. Net profit for the year is Rs. 1,10,000. Determine the amount of commission payable to A.

Solution

Net Profit before charging commission = Rs. 1,10,000
Commission to A = 10% of on Net Profit before charging such commission       
Partner’ s Commission = (Net profit×rate of commission)/100
A’ s Commission = (1,10,000×10)/100=11,000

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