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X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000?
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X and Y are partners with profit sharing ratio of 1:2 with capital of ...
Partnership and Profit Sharing Ratio
Introduction
In a partnership, two or more individuals come together to carry on a business with a view to earn profit. The partners contribute capital, share profits and losses, and jointly manage the affairs of the business. The profit sharing ratio is the proportion in which the partners share the profits of the business.
Given Information
- X's capital = Rs 400,000
- Y's capital = Rs 600,000
- Profit sharing ratio = 1:2 (X:Y)
Calculation
The total capital invested by X and Y is :
Total capital = X's capital + Y's capital
Total capital = Rs 400,000 + Rs 600,000 = Rs 1,000,000
The profit sharing ratio is 1:2, which means that out of the total profit earned, X will get 1/3rd and Y will get 2/3rd.
Let the total profit earned be Rs P. Then,
- X's share of profit = (1/3) x P
- Y's share of profit = (2/3) x P
The profit sharing ratio can also be expressed in terms of capital. X's share of profit will be equal to the ratio of his capital to the total capital, multiplied by the total profit. Similarly, Y's share of profit will be equal to the ratio of his capital to the total capital, multiplied by the total profit. Therefore,
- X's share of profit = (X's capital / Total capital) x Total profit
- Y's share of profit = (Y's capital / Total capital) x Total profit
Substituting the values, we get:
- X's share of profit = (400,000 / 1,000,000) x P = 0.4P
- Y's share of profit = (600,000 / 1,000,000) x P = 0.6P
Conclusion
In conclusion, X and Y are partners in a business with a profit sharing ratio of 1:2. X has invested Rs 400,000 and Y has invested Rs 600,000. The total capital invested is Rs 1,000,000. The profit sharing ratio means that out of the total profit earned, X will get 1/3rd and Y will get 2/3rd. This can also be expressed in terms of capital, with X's share of profit being 0.4P and Y's share of profit being 0.6P.
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X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000?
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X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000?.
X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X and Y are partners with profit sharing ratio of 1:2 with capital of rs 400000 and rs 600000?.
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