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# (Online Course) CSAT Paper - II : Basic Numeracy: Partnership

## Basic Numeracy

## Partnership

## Partnership

When two or more than two persons run a business jointly, they are called partners in the business and the deal between them is known as partnership.

## Partnership is of two types

- Simple Partnership
- Compound Partnership

**1. Simple Partnership: **When investments of all the partners are for
the same period of time, the profit or loss is distributed among the partners in
the ratio of their original investments.

Suppose A and B invest Rs. p and Rs. q respectively for a year in a business,
then at the end of the year. Share of A’s profit (loss) : Share of B’s profit
(loss) = p : q.

**2. Compound Partnership:** When investments of all the partners are for
different period of time, then equivalent capitals are calculated for a unit of
time and the profit or loss is divided in the ratio of the product of time and
investment.

Suppose A and B invest Rs. p and Rs. q for x months and y months respectively,
then Share of A’s profit (loss):

Share of B’s profit (loss) = px : qy. Partners are of two types

(i) Working Partner, and

(ii) Sleeping Partner

**(i) Working Partner:** A partner who manages the business is called a
working partner.**(ii) Sleeping Partner:** A partner who only invests the money is called a
sleeping partner.

**Example 1:** A and B started a business with capitals of Rs. 25000 and
Rs. 40000 respectively. Find the share of A and B out of an annual profit of Rs.
6500.**Solution. **Ratio of shares of A and B = Ratio of their investments = 25000
: 40000 = 5 : 8

**Example 2:** A, B and C start a business each investing Rs. 16000. After
3 months A withdrew Rs. 2000, B withdrew Rs. 4000 and C invests Rs. 8000 more.
At the end of year a total profit of Rs. 41580 made. Find the share of A, B and
C

**Solution. **Ratio of capitals of A, B and C

= (16000 × 3 + 14000 × 9) : (16000 × 3 + 12000 × 9) : (16000 × 3 + 24000 × 9)

= 174000 : 156000 : 264000 = 29 : 26 : 44

**Example 3:** A, B and C enter into a partnership with a total of Rs.
8200. A’s capital is Rs. 1000 more than B’s and Rs. 2000 less than Cs. What is
B’s share of the year’s profit of Rs. 2,460.**Solution. **Given, A = B + 1000 = C – 2000

C = B + 3000

A + B + C = (B + 1000) + (B) + (B + 3000)

8200 = 3B + 4000 Þ 3B = 8200 – 4000 B = Rs. 1400