A, B and C started a business by investing ₹40,000, ₹50,000 and ₹60,000 respectively. After 8 months B withdrew ₹10,000. After one more month C withdrew ₹40,000. Find the ratio in which profit earned at the end of the year will be distributed.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 12 : 14 : 15
Profit is shared in the ratio of each partner’s capital multiplied by the time it stayed in the business. When a partner withdraws part of the capital, the two periods are worked out separately and added.
A: ₹40,000 for 12 months \(=40000\times12=480000\)
B: ₹50,000 for 8 months, then ₹40,000 for 4 months:
First 8 months: \(50000\times8=400000\)
Last 4 months: \(40000\times4=160000\)
Total \(=560000\)
C: ₹60,000 for 9 months, then ₹20,000 for 3 months:
First 9 months: \(60000\times9=540000\)
Last 3 months: \(20000\times3=60000\)
Total \(=600000\)
Ratio \(=480000:560000:600000=48:56:60=12:14:15\)