If following Three Items are given in Question (i) Partners' Salaries Rs 20,000 (ii) Commission to A 10% brfore Charging such commission and commission to B 10% after charging such commission (iii)Profits before salaries and commission Rs 1,00,000.What amount of Profit will be taken for applying commission % ie Rs. 1,00,000 or Rs 80,000 (Rs 1,00,000-Rs 20,000 of salaries),as here not clarified for commission % whether Profits to be taken before partners salaries or after partners salaries.

asked Dec 31, 2015 in Partnership-Fundamentals by Bhanu (5 points) 308 views
edited Dec 31, 2015 by Bhanu

1 Answer

0 votes

Actually in this question another important input is missing that is commission is to some % of profits.  In the given circumstances it seems more appropriate to charge commission after charging salary.  This is so because the question specifically says that commission should be given either before or after charging commission.  It is not talking about partners' salary.  Hence it can safely be assumed that commission is to given after charging salaries from profits.

answered Jan 1, 2016 by jbsclasses (3,971 points)