Partner L gets a salary of R30 000 per annum. Each partner is entitled to 8% interest

per year on their capital. The balance is divided among L, M, and S in the ratio 2:3:5. Divide the profit among the partners .

1 answer

To calculate the total profit, we first need to calculate the total capital of the business. Partner L receives 8% interest on their capital:

8% of L's capital = 0.08 * R30,000 = R2,400

So, L's capital is R30,000 - R2,400 = R27,600

Since each partner is entitled to 8% interest on their capital, the total capital of the business is:

Total capital = (R27,600 * 100) / 8 = R345,000

The profit to be divided is calculated as total capital minus the total annual salary:

Profit = R345,000 - R30,000 = R315,000

The profit is divided among L, M, and S in the ratio 2:3:5, which means the total ratio is 2 + 3 + 5 = 10 parts.

L's share = (2/10) * R315,000 = R63,000
M's share = (3/10) * R315,000 = R94,500
S's share = (5/10) * R315,000 = R157,500

Therefore, the profit is divided as follows:
L receives R63,000,
M receives R94,500,
S receives R157,500.