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A, B and C enter into a partnership. Their contributions are Rs. 30 lakhs, Rs. 20 lakhs, and Rs. 10 lakhs respectively. A and B are working partners while C is a sleeping partner. A and B get 10% and 15% of gross profit respectively as salary for managing the business. If at the year end C receives $ 3.75 lakhs, as profit, find the share of A.
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- $ 16 Lakhs
- $ 12 Lakhs
- $ 18 Lakhs
- $ 14.25 Lakhs
Correct Option: D
Let the gross profit be p
| A’s salary = | p = 0.10p | 100 |
B’s salary = 0.15p
Net profit = gross profit - ( A’s salary + B’s salary )
Net profit = p – (0.10p + 0.15p) = 0.75p
The net profit will be shared among three partners in proportion to their capital contributions.
∴ Ratio of capital contributions,
A : B : C = 30 : 20 : 10
A : B : C = 3 : 2 : 1
Sum of the ratios = 3 + 2 + 1 = 6
| C’s share in the net profit = | × 0.75p | 6 |
| But, | p = 3.75 | 6 |
| ⇒ p = 6 × | 0.75 |
⇒ p = 30
So, Gross profit = p = $ 30 lakhs
Total share for A or B will be sum of their salary and share in the net profit.
| A’s share = 0.10p + | × 0.75p | 6 |
A’s share = 0.10p + 0.375 p = 0.475 p
[ ∵ Gross profit, p = 30 lakhs ]
A’s share = 0.475 × 30 = 14.25 lakhs
| & B’s share = 0.15p + | × 0.75p | 6 |
B’s share = 0.15 p + 0.25 p
B’s share = 0.40 × 30 = 12 lakhs
