Profit Sharing Calculation
Profit sharing in a business partnership is typically distributed based on the ratio of investments made by each partner. Here, we calculate A's share of the profit based on the given investments.
Investment Ratio Determination
First, determine the ratio of investments between partner A and partner B.
- A's Investment: $40,000$
- B's Investment: $60,000$
- Investment Ratio (A:B) = $40,000 : 60,000$
- Simplify the ratio by dividing both sides by $20,000$: $2 : 3$
Calculating A's Profit Share
The total profit is divided according to the investment ratio. The total parts in the ratio are $2 + 3 = 5$.
- A's share of the total profit is calculated as:
(A's Investment Ratio Part / Total Ratio Parts) $\times$ Total Profit - A's Profit = $\frac{2}{5} \times 20,000$
- A's Profit = $2 \times \frac{20,000}{5}$
- A's Profit = $2 \times 4,000$
- A's Profit = $8,000$
Therefore, A will receive $8,000 as profit.
Similar Questions
- Two partners M and N buy a car. M pays his share of $\frac{3}{7}$th of the total cost of the car. M pays ₹ 31,540 less than N. What is the cost of the car?
Important Questions from Partnership
A, B and C invest in a business in the ratio 4 ∶ 5 ∶ 7. C is a sleeping partner, so his share of profits will be half of what it would have been if he were a working partner. If they make Rs 36,000 profit of which 25% is reinvested in the business, how much does B get (in Rs)?
Sumit, Ravi and Puneet invest Rs. 45000, Rs. 81000 and Rs. 90000 respectively to start a business. At the end of the year the total profit is Rs. 4800. 30% of the total profit gives in charity and rest is divided among them. What will be the share of Sumit?
A sum of ₹ 159250 is divided among A, B, C, and D such that the ratio of the shares of A and B is 1 : 3, that of B and C is 2 : 5, and that of C and D is 2 : 3. The share (in ₹) of A is:
A and B start a business by investing Rs. 1,00,000 and Rs. 1,50,000 respectively. Find the respective share of each out of a total profit of Rs. 24, 000.
Two partners A and B have started business with the capitals of Rs. 6,000 and Rs. 8,000 respectively. If they made profit of Rs. 5,600 then the share (in Rs.) of A is:
