Chandan received as Manager = Interest on Loan + Salary
= 7,200 T 36,000 = 43,200
Total Profit of 4 years before interest on Chandan’s Loan an d Salary
= 2,38,200 Interest on Chandan’s Capital for 4 years
= {20,000 x (6/100) = 1,200}
= 1,200 x 4 = 4,800
Profit after interest on all partners Capital
= Total Profit of four years before interest on Chandan’s loan and Salary – Interest on Chandans capital for four years.
= 2,38,200 – 4,800 = 2,33,400
Wrong Distribution – Distribution of 4 years
Profit when Chandan as a Manager
kavita (1,95,000 x (3/5) = 1,17,000
Pradeep (1,95,000 x (2/5) = 78,000
Chandan received as manager = Interest on Loan + Salary
Right distribution – Division of Profit when Chandan as Partner
Kavita’s share of profit (2,33,400 – 38,900) x (3/5) = 1,16,700
Pradeep’s share of Profit (2,33,400 – 38,900) x (2/5) = 77,800