Multiple choice

Manu and Hanu are partners. Manu contributed Rs. 1,00,000 on April 1 while Hanu contributed Rs. 50,000 on August 1 and Rs. 1, 00,000 on December 1. The profits on March 31 are to be divided in their capital contribution ratio. Calculate profit sharing ratio.

  1. 3 : 2

  2. 2 : 3

  3. 1 : 1

  4. 2 : 1

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A Correct answer
Explanation

This is the correct answer. Capital contribution on monthly basis of Manu = 1,00,000 * 12 = 12, 00,000 while that of Hanu (50,000 * 8 + 1,00,000 * 4) = 8, 00,000. Thus, profit ratio will be 12, 00,000 : 8, 00,000, i.e. 3 : 2.