Partnership Problems Tricks
Partnership is an association of two or more parties, they put money for business.
Division of Profit and Loss
Rule: When investment of all partners are for the same time, the loss or profit is distributed among partners in the ratio of investment.
Example Let P and Q invested Rs. a and b for one year in a business then share of profit and loss be, P's share of profit : Q's share profit = a : b
Rule: When investments are for different time period, then profit ratio is calculated as capital multiplied by length of investment.
Example P's share of profit : Q's share profit = a* t1 : b* t2
Example Three partners A, B and C invested Rs. 1000, Rs. 1200 and Rs. 1500 respectively in business for one year. How should they divide a profit of Rs. 1295 ?
As investment period is same so, profit should be divided in ratio of capitals as, 10 : 12 : 15, also 10 + 12 + 15 = 37 A's share = 10/37 * 1295 = 350 B's Share = 12/37 * 1295 = 420 C'share = 15/37 * 1295 = 525