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A and B are two partners contributing RS-50000 and RS-40000 respectively, they agreed that interest on capital at 5% p. a will be given to partners. B will be given 10% of the profit as remuneration for managing the business and balance of profit is to be divided in their capital ratio. If profit during the year is RS-25000, find the share of each.?
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A and B are two partners contributing RS-50000 and RS-40000 respective...




Calculation of Profit Share


Given data:


  • Partner A's capital: RS-50000

  • Partner B's capital: RS-40000

  • Interest on capital: 5% p.a.

  • Partner B's remuneration: 10% of the profit

  • Total profit: RS-25000



Step 1: Calculation of Interest on Capital


To calculate the interest on capital, we need to multiply each partner's capital by the interest rate.


  • Interest on A's capital: RS-50000 * 5% = RS-2500

  • Interest on B's capital: RS-40000 * 5% = RS-2000



Step 2: Calculation of Partner B's Remuneration


Partner B's remuneration is 10% of the profit. So, we need to calculate 10% of RS-25000.


  • Partner B's remuneration: RS-25000 * 10% = RS-2500



Step 3: Calculation of Remaining Profit


After deducting the interest on capital and partner B's remuneration from the total profit, we get the remaining profit to be divided in their capital ratio.


  • Remaining Profit: RS-25000 - RS-2500 - RS-2500 = RS-20000



Step 4: Division of Remaining Profit


The remaining profit of RS-20000 is to be divided in their capital ratio. The capital ratio is calculated by dividing each partner's capital by the total capital.


  • Total Capital: RS-50000 + RS-40000 = RS-90000

  • Partner A's Capital Ratio: RS-50000 / RS-90000 = 5/9

  • Partner B's Capital Ratio: RS-40000 / RS-90000 = 4/9



Now, we can calculate the share of each partner:


  • Partner A's Share: RS-20000 * (5/9) = RS-11111.11

  • Partner B's Share: RS-20000 * (4/9) = RS-8888.89



Answer


The share of each partner in the profit of RS-25000 is as follows:


  • Partner A's Share: RS-11111.11

  • Partner B's Share: RS-8888.89




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A and B are two partners contributing RS-50000 and RS-40000 respectively, they agreed that interest on capital at 5% p. a will be given to partners. B will be given 10% of the profit as remuneration for managing the business and balance of profit is to be divided in their capital ratio. If profit during the year is RS-25000, find the share of each.?
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