Multiple choice

A and B are partners sharing profit and loss in the ratio of 3 : 2 (A's capital is Rs. 60, 000 and B's capital is Rs. 30, 000). They admit C and agreed to give 1/5th share of profit to him. How much should C bring in towards his capital?

  1. Rs. 18, 000

  2. Rs. 24,000

  3. Rs. 29, 000

  4. Rs. 22, 500
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Total capital of A and B = 60,000 + 30,000 = 90,000. C gets 1/5 share, so the remaining 4/5 belongs to A and B. The total firm capital based on C's proportionate share would be 90,000 ÷ (4/5) = 1,12,500. Therefore, C's capital = 1,12,500 × 1/5 = 22,500. Alternatively, C should bring capital in the same ratio as his profit share relative to the old partners' combined capital.

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