Calculate Partnership Profit Ratio
Profit distribution in a partnership depends on both the amount invested and the duration of the investment. The ratio of profit is calculated as the product of investment amount and duration for each partner.
Investment and Duration Setup
Let the investments of Mansi and Neha be $7x$ and $9x$ respectively. Utsavi joined later with an investment equal to Neha's, which is $9x$. The total duration is one year (12 months).
- Mansi's Investment: $7x$ for 12 months
- Neha's Investment: $9x$ for 12 months
- Utsavi's Investment: $9x$ for $12 - 6 = 6$ months (since Utsavi joined after 6 months)
Profit Share Calculation
Calculate the product of investment and duration for each partner:
- Mansi's Profit Share = $7x \times 12 = 84x$
- Neha's Profit Share = $9x \times 12 = 108x$
- Utsavi's Profit Share = $9x \times 6 = 54x$
Final Profit Distribution Ratio
The ratio of profit distribution is Mansi : Neha : Utsavi:
Ratio = $84x : 108x : 54x$
Divide each term by $x$ to get:
Ratio = $84 : 108 : 54$
Simplify the ratio by dividing by their greatest common divisor, which is 6:
- $84 \div 6 = 14$
- $108 \div 6 = 18$
- $54 \div 6 = 9$
The profit distribution ratio is 14 : 18 : 9.
Important Questions from Partnership Act, 1932
- Which of the following provision of the Partnership Act explains the evidentiary value of entries in the Register of Firms?
- Which of the following is correct?
The important provision affecting partnership accounting, in the absence of a partnership deed is: - Atul, Bharat, and Chetan enter into a partnership. Atul invests $₹25,000$ for 6 months, Bharat invests $₹30,000$ for 8 months, and Chetan invests $₹40,000$ for 9 months. If the total profit is $₹37,000$, what is Chetan's share of the profit?
As per Section 45 of the Indian Partnership Act, 1932, notwithstanding the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until:
As per Section 6 of the Indian Partnership Act, 1932, in determining whether a group of persons is or is not a firm, regard shall be had to which of the following?
