Multiple choice

X, Y & Z commence a business in partnership. X puts in Rs. $20,000$ for the whole year. Y introduced Rs. $30,000$ and increases it Rs. $40,000$ at the end of four months but withdraws Rs. $10,000$ at the end of eight month. Z brings Rs. $50,000$ at first, but withdraws Rs. $15,000$ at the end of six months. Calculate the profit sharing ratio based on effective capital.

  1. $24:40:51$
  2. $41:22:54$
  3. $6:4:3$
  4. $17:13:8$
Reveal answer Fill a bubble to check yourself
A Correct answer
AI explanation

To determine the effective capital ratio, we multiply each partner's invested principal by the number of months it remained invested. X's effective capital is Rs. 20,000 multiplied by 12 months, yielding 240,000. Y's effective capital is Rs. 30,000 for 4 months plus Rs. 70,000 for 4 months plus Rs. 60,000 for 4 months, totaling 400,000. Z's effective capital is Rs. 50,000 for 6 months plus Rs. 35,000 for 6 months, totaling 510,000. By simplifying the ratio of these products, 240000 : 400000 : 510000, we get the final effective capital ratio of 24 : 40 : 51.

Keep practicing — related questions