Question

Ram & Rahim partners sharing profits & losses in the ratio of their effective capital. They had Rs. 2,00,000 and Rs 1,20,000 respectively in their capital accounts as on 1st January, 2012. Ram introduced a further capital if Rs 20,000 on 1st April, 2012 and another Rs 10,000 on 1st July, 2012. On 30th September, 2012 Ram withdrew Rs 80,000. On 1st July, 2012, Rahim introduced further capital of Rs 60,000. Calculate the profit sharing ratio of Ram & Rahim.

• A. 4:3
• B. 3:4
• C. 2:3
• D. 3:2

Answer 1

The correct option is A 4:3

As per the question, profit sharing ratio of partners is based upon their effective capital, that is, capital amount at the end.

Effective capital of Ram$=Rs2,00,000+Rs20,000+Rs10,000-Rs80,000=Rs1,50,000$

Effective capital of Rahim$=Rs1,20,000+Rs60,000=Rs1,80,000$

Profit sharing ratio of partners is$1,50,000:1,80,000=15:18=5:6$.