Q2. Partnership

Investment of Capital for Unequal Periods

When capitals of different partners are invested in business for different length of time, the capital is first adjusted to a common period say 1 month or 1 day by multiplying each partner's capital by the period for which it is invested. The profit sharing ratio is then determined from the adjusted effective capital.



A, B and C engaged in a business and made investment and withdrawal of capital as follows:

January 1, A put ₹15000, on May 1, A added ₹10000 and withdrew ₹8000 on October 1;
B put in ₹20000 on January 1, withdrew ₹5000 on July 1 and added ₹2000 on November 1;

C put in ₹15000 on January 1, withdrew ₹5000 on April 1 and added ₹20000 on September 1.

At the end of the year B's share of profit is ₹9630.

Based on the above information, answer the following questions:

(i) A's effective capital for 1 month is

(a) ₹57000
(b) ₹228000
(c) ₹236000
(d) ₹328000

(ii) Sum of B's and C's effective capitals for 1 month is

(a) ₹107000
(b) ₹429000
(c) ₹215000
(d) ₹214000

(iii) C's share of profit is
(a) ₹6450
(b) ₹7445
(c)  ₹9675
(d)  ₹10245

(iv) How much A's share of profit is more than B's share?

(a) ₹940
(b) ₹660
(c) ₹720
(d) ₹1090

(v) Sum of A's and C's shares of profit is

(a) ₹18325
(b) ₹20295
(c) ₹21495
(d) ₹19375

Solution