Partnership

PARTNERSHIP

Partnership is a business where two ( or more) partners invest a certain amount ( known as capital)For a specific period to carry out the business . At the end of the period ( usually one year), the business may generate profit or loss. This profit or loss is divided among the partners in the ratio of their investments.The proportion in which profit or loss would be distributed amongst the partners is given by theratio of the joint product of the capital invested and the period of investment for each partner.If the time for which the various investments are in the business is different , find out the ‘monthlyequivalents’ of the investments , by multiplying the investments by the number of years for whichthey are in the business . Thus, if A and B are in partnership, at the end of one year ( which is aconvention) , the profit or loss would get distributed as:Profit ( or loss) = ( capital invested) X ( period of investment)Profir ( or loss) = ( capital invested) X ( period of investment)Minor variations in the above can take place as :(1)A partner retires during the one year period – in such case, only the period for which hiscapital was utilized, is taken into consideration.(2)A Partner joins during the one year period -- in such case, only the period for which hiscapital was utilized , is taken into consideration.www.MBAtutes.com1

Partnership

EXERCISE

1.A started business with an investment Rs 60,000. Four months later , B joined him with hisinvestment Rs 60,000. If at the end of the year, Rs 35000 profit is made, what is the shareof A in the same?(1)Rs 14,000(2) Rs 21,000(3) Rs 15,000(4)Rs 20,000(5) None of these2.A started a business with a capital of Rs 10,000. Four months later , B joined him and 2more months later , C joined them in the partnership . If at the end of one year, B receives ashare of profit as Rs 25,000 , what is the total profit made?(1)Rs 15,000(2)Rs 20,000(3)Rs 18,000(4)Rs 22,000(5)None of these3.A,B and C started a business in partnership by investing Rs 6,000 , Rs 4,000 and Rs 10,000respectively. However, B quits after 6 months. If at the end of one year , B receives a shareof profit as Rs 2,500, what is the total profit made?(1)Rs 25,000(2)Rs 22,500(3)Rs 20,000(4)Rs 28,000(5)None of these4. Yogesh, Mahesh and Bhavesh started a business in partnership by investing the amounts inthe ratio of 3 : 7: 11 . After 4 months , Bhavesh withdrew. In what proportion will the profitmade at the end of one year be distributed in sequence “Yogesh: Mahesh: Bhavesh”?(1) 9:7:11(2) 9:21:7(3)9:21:11www.MBAtutes.com2

Partnership(4) 3:7:7(5) none of these5.A starts a business with a capital of Rs 10,000 and 4 months later , B joins him with his capital of Rs 6,000. What is the share of B in the profit of Rs 2,100 at the end of the year?(1)Rs 500(2)Rs 600(3)Rs 1,200(4)Rs 1,500(5)None of these6. In a partnership business, A invests Rs 20,000 for two years, B invests Rs 40,000 for 1and a half years, C invests Rs 30,000 for one year and D invests Rs 35,000 for two years .Out of the total profit made, C gets a share of 20% as a ‘working partner’ before the profitis further distributed amongst all of them. What would be the share of C in the total profitof Rs 25,000?(1)Rs 9,000(2)Rs 7,000(3)Rs 11,000(4)Rs 8,000(5)None of these7. Ajay and Anil started a business in partnership. Anil invested Rs 300 more than Ajay for half the number of months that Ajay did. If , out of the total profit of Rs. 375 of one year, Ajay got Rs25 more than Anil , what was the investment made by Anil?(1)Rs 800(2)Rs 700(3)Rs 350(4)Rs 400(5)None of these8. B receives 1/8 of the profits of a business as wages and the rest is divided between B abd A inthe proportion of their capitals of Rs 6,000 and Rs 8,000 respectively. If in a year , B receives Rs1,000 totally , what does A receive?(1) Rs 800(2) Rs 1,000(3) Rs 1,200(4) Rs. 1,500(5) none of thesewww.MBAtutes.com3