Multiple choice

Ram & Rahim partners sharing profits and losses in the ratio of their effective capital. They had Rs.$2,00,000$ and Rs.$1,20,000$ respectively in their capital accounts as on $1$st January, $2012$. Ram introduced a further capital of Rs.$20,000$ on $1$st April, $2012$ and another Rs.$10,000$ on $1$st July, $2012$. On $30$th September, $2012$ Ram withdraw Rs.$80,000$. On $1$st July, $2012$, Rahim introduced further capital of Rs.$60,000$. Calculate the profit sharing ratio of Ram & Rahim.

  1. $4:3$
  2. $3:4$
  3. $2:3$
  4. $3:2$
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A Correct answer
Explanation

Calculate the effective capital for each month. Ram: (200,000 * 3) + (220,000 * 3) + (230,000 * 3) + (150,000 * 3) = 600,000 + 660,000 + 690,000 + 450,000 = 2,400,000. Rahim: (120,000 * 6) + (180,000 * 6) = 720,000 + 1,080,000 = 1,800,000. Ratio = 2,400,000 : 1,800,000 = 24 : 18 = 4 : 3.

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