- Partnership:When two or more than two persons run a business jointly, they are called partners and the deal is known as partnership.
- Ratio of Divisions of Gains:
- When investments of all the partners are for the same time, the gain or loss is distributed among the partners in the ratio of their investments.Suppose A and B invest Rs. x and Rs. y respectively for a year in a business, then at the end of the year:(A’s share of profit) : (B’s share of profit) = x : y.
- When investments are for different time periods, then equivalent capitals are calculated for a unit of time by taking (capital x number of units of time). Now gain or loss is divided in the ratio of these capitals.Suppose A invests Rs. x for p months and B invests Rs. y for q months then,(A’s share of profit) : (B’s share of profit)= xp : yq.
- Working and Sleeping Partners:A partner who manages the the business is known as a working partner and the one who simply invests the money is a sleeping partner.
1. A and B invest in a business in the ratio 3 : 2. If 5% of the total profit goes to charity and A’s share is Rs. 855, the total profit is: A. Rs. 1425 B. Rs. 1500 C. Rs. 1537.50 D. Rs. 1576
Answer: Option B
Let the total profit be Rs. 100.
After paying to charity, A’s share = Rs. 95 x 3 = Rs. 57. 5
If A’s share is Rs. 57, total profit = Rs. 100.
If A’s share Rs. 855, total profit = 100 x 855 = 1500. 57