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Partnership

What is Partnership?

The form of association of two or more persons, who contributes resources like money together in order to carry on a business, is known as partnership. It is of following two types:

- Simple Partnership: A partnership in which capitals of the partners are invested for the same time is known as simple partnership. The profits or losses are divided among the partners in the ratio of their investment.
- Compound Partnership: A partnership, in which the capitals of the partners are invested for different periods, is known as compound partnership. In such cases equivalent capitals are calculated for each partner by multiplying their capital contributions with time. The profits or losses are then divided in the ratio of these equivalent capitals.

A partner who only invests capitals but does not participate in the working of the business is called a sleeping partner while one who also participates in the working of business is called a working partner. A working partner gets either monthly payment or a share in the profit for his contribution in the management of the business. This payment is deducted from the total profit before its distribution.

Ques1. A starts a business with Rs.3500 and after 10 months, B joins with A as his partner. After two year the profit is divided in the ratio 2:3. What is B’s contribution in capital?

- 2000 b.) Rs.1500 c.) Rs.3000 d.) Rs.2500 e.) None of these

Explanation: Answer is B

Let B invest Rs. x

∴ Ratio of their investment = 24 * 3500 : 14x

Since, the profit is divided in the ratio 2:3

∴

Ques2. A, B and C enter into a partnership and their share are in ratio After 2 month A withdraws half of his capital and after 10 months a profit of Rs.478 is divided among them. What is B’s share?

- 129 b.) Rs.180.37 c.) Rs.156 d.) Rs.168 e.) None of these

Explanation: Answer is B

Ratio of their investment =

Let the investment of A, B and C are Rs.6x, Rs.4x and Rs.3x respectively.

Now the ratio of their investment = (6x * 2 + 3x * 8): (10 * 4x): (10 * 3x)

= 36x:40x:30x = 18:20:15

Total Profit = Rs.478

∴ B’s share = Rs.180.37

Ques3. Ajay and Deepak started a business investing Rs.25000 and Rs.35000 respectively. Out of a total profit of Rs.15000, Deepak’s share is:

- 5400 b.) Rs.7200 c.) Rs.8750 d.) Rs.9600 e.) None of these

Explanation: Answer is C

Ratio of their shares = 25000: 35000 = 5:7

Deepak’s share = Rs. = Rs.8750

Ques4. Reena and Shaalo are partners in a business. Reena invests Rs.30000 for 8 months and Shaalo invests for Rs.52000 for 10 months. Out of a profit of Rs.19000, Reena’s share is:

- 6000 b.) Rs.6028 c.) Rs.8040 d.) Rs.8942 e.) None of these

Explanation: Answer is A

Ratio of their shares = (30000 * 8): (52000 * 10) = 6:13

Reena’s share = Rs.

Ques5. Karan started a business investing Rs.7000. After six months, Sanjay joined with a capital of Rs.6000. If at the end of the year, they earn a profit of Rs.5970, then what will be the share of Sanjay in the profit?

- 1800 b.) Rs.1791 c.) Rs.1690 d.) Rs.1864 e.) None of these

Explanation: Answer is B

Karan: Sanjay = (7000 * 12): (6000 * 6) = 84: 36 = 7: 3

∴ Sanjay’s share = Rs.