Partnership 1) Partnership: If two or more than two persons run a business jointly, then they are called partners and the deal is known as partnership. There are two types of partnership: simple partnership and compound partnership. 2) Simple partnership: a) In this type of partnership, the capitals of each of the partners are invested for same time. b) Gains or losses are divided among the partners in the ratio of their investments. 3) Compound partnership: a) In this type of partnership, the periods of investments are unequal. b) Equivalent capitals for a unit of time are calculated by multiplying the capital with number of units it was in business. 4) Working partner: Partner managing the business 5) Sleeping partner: Partner investing money Quick tips and tricks: Ratio of division of gains: 1) Simple partnership: Partners invest for same time. Suppose P and Q invest Rs. x and Rs. y respectively for a year in a business, at the end of the year:
x : y = P’s share of profit : Q’s share of profit 2) Compound partnership: When partners invest for different time periods, then equivalent capitals are calculated for a unit of time by taking (capital x number of units of time). Suppose P and Q invest Rs. x for a months and Rs. y for b months respectively then,
Capital (amount) of P x Time period of P: Capital (amount) of Q x Time period of Q = P’s share of profit : Q’s share of profit When n number of partners invests for different time periods T, then A1T1: A2T2: A3T3 ……: AnTn = P1: P2: P3....: Pn A is the amount, T is the time period and P is the profit earned. Question Variety Type 1: Simple Partnership: a) Two Partners Join at Same Time to Start a Business: Note: Different cases/types: The questions are twisted in exams in the following different forms shown below:  Q 1. Smith and Kate started a business investing Rs. 84,000 and Rs. 28,000 respectively. In what ratio the profit earned after 2 years be divided between Smith and Kate respectively? a. 2 : 3 b. 3 : 1 c. 13 : 3 d. None of these Correct Option: (b)
x : y = P’s share of profit : Q’s share of profit Therefore,
Q 2. Sham and Ram invested in a business and gained a profit which was divided in the ratio of 2 : 3. If Sham invested Rs. 40,000, then what was the amount invested by Ram? a. Rs. 30,000 b. Rs. 45,000 c. Rs. 60,000 d. Rs. 75,000 Correct Option: (c)
Let the amount invested by Ram be Rs. X Therefore,
Amount invested by Ram = Rs. 60,000 b) Three partners join at same time to start a business Q 3. John, Tyson and Mike started a business by investing Rs.1,00,000, Rs. 1,50,000 and Rs. 1,75,000 respectively. Find the share of Mike, out of an annual profit of Rs. 46,000. a. Rs. 15941. 93 b. Rs. 16943. 59 c. Rs. 18941. 17 d. Rs. 19971. 03 Correct Option: (c)
Q 4. Harry, John and Smith start a shop by investing Rs. 27,000. Rs. 72,000 and Rs. 81,000 respectively. At the end of the year, the profit was distributed among them and Smith earns the share of Rs. 36,000. Find the total profit. a. Rs. 1,10,000 b. Rs. 1,2,5000 c. Rs. 98,000 d. Rs. 80,000 Correct Option: (d)
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Type 2: Compound Partnership: A) 2 Partners Join at Different Time in a Business 1) Given: Investment of partners and time of each joining partner. Total profit earned after specified time. Find: Share of profit 2) Given: Investment of two partners and time of joining partner. Ratio of profit earned. Find: Partner 2nd joining the business with 1st partner. Q 5. George started a hardware business by investing Rs. 50,000. After six months, Kate joined him with a capital of Rs. 70,000. After 3 years, they earned a profit of Rs. 25,000. Find George’s share in profit. a. Rs. 13000.00 b. Rs. 13224.65 c. Rs. 12500.50 d. Rs. 11538.46 Correct Option: (d)
Always try to simplify this type of numerical by arranging them in table format as shown below: 
Q 6. Rohan began a business with Rs. 85,000 and was joined by Sanket with Rs. 42,500. If the profits at the end of the year are divided in the ratio of 3 : 1, then find for how much period of time did Sanket join Rohan? a. 10 months b. 9 months c. 8 months d. 7 months Correct Option: (c)
Let us assume the joining period of Sanket = X Given: 1) Profits at the end of the year are divided in the ratio of 3 : 1 2) Rohan’s earns a profit after 12 years Therefore,
Sanket joined for 8 months. b) 2 Partners Join at Same Time and 3rd Partners Joins the Same Business Later Q 7. Two partners X and Y started a business by investing in the ratio of 5 : 8. Z joined them after 8 months investing an amount equal to that of Y. At the end of the year, 20 % profit was earned which is equal to Rs. 98,000. Find the amount invested by Z. a. Rs. 213818.16 b. Rs. 223878.12 c. Rs. 203818.16 d. Rs. 219818.13 Correct Option: (a) C) 3 Partners Join at Different Time Q 8. Three partners partnered for 14 months, 8 months and 7 months respectively. Find the ratio of their investments, if they shared a profit in the ratio 5 : 7 : 8. a. 11 : 19 : 37 b. 17 : 25 : 57 c. 15 : 33 : 68 d. 20 : 35 : 64 Correct Option: (d)
From (1) and (2), we get
x : y : z = 20 : 35 : 64 |
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