Multiple choice

C was admitted in a firm with 1/4th share of the profits of the firm. C contributes Rs. 37,500 as his capital, A and B are other partners with the profit sharing ratio as 3:2. Find the required capital of A and B, if capital should be in profit sharing ratio taking C's as base capital.

  1. Rs. 67,500 and Rs. 40,000 for A and B respectively.

  2. Rs. 67,500 and Rs. 45,000 for A and B respectively.

  3. Rs. 80,000 and Rs. 52,500 for A and B respectively.

  4. Rs. 77,500 and Rs. 65,000 for A and B respectively.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

C's share is 1/4, capital 37500. Total capital = 37500 * 4 = 150000. Remaining share for A and B is 3/4. A and B share in 3:2 ratio. A's capital = 150000 * (3/4) * (3/5) = 67500. B's capital = 150000 * (3/4) * (2/5) = 45000.

AI explanation

C's capital of Rs.37,500 represents his 1/4th share of the firm's total capital, so the total capital is calculated as 37,500 multiplied by 4, giving Rs.1,50,000. The remaining capital for A and B is 1,50,000 minus 37,500, which equals Rs.1,12,500. Since A and B share profits in a 3:2 ratio, A's required capital is 3/5 of 1,12,500, resulting in Rs.67,500, and B's required capital is 2/5 of 1,12,500, resulting in Rs.45,000. The required capital of A and B is Rs.67,500 and Rs.45,000 respectively.

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