What is a Partnership?

A partnership is a type of business in which two or more persons enter into a legal agreement to be co-owners, allocate responsibility for running the organization, and share the company’s profits or losses.

How many types of partners are there?

Working partner: An active partner is someone who is actively involved in and supervises the business.

Sleeping partner: A sleeping partner is a partner who invests money but is not involved in or responsible for the firm.

Simple partnership: A partnership in which each member invests capital for the same duration.

Simple Partnership Formula: If P and Q contributed Rs. a and b, respectively, to a firm for one year, their profit (or loss) at that time would be P’s Profit (or misfortune): Q’s profit (or misfortune) = a:b

Compound partnership: A partnership in which the parties spend capital for different time period..

Compound Partnership Formula: In a compound partnership, different investors invest their money for varying periods of time. The benefit-sharing proportion is calculated by multiplying the capital contribution by the unit of time (usually months).

Compound Partnership Formula: P₁: P₂ = C₁ × T₁: C₂ × T₂.

Here,

P₁ represents Partner 1’s profit.

C₁ represents Partner 1’s capital.

T₁ = The time period during which Partner 1 contributed his capital.

P₂ represents Partner 2’s profit.

C₂ represents Partner 2’s capital.

T₂ = The time period during which Partner 2 contributed his capital.

Practice Quizzes

Partnership Quiz 1 – Coming Soon

Partnership Quiz 2 – Coming Soon

Partnership Quiz 3 – Coming Soon

Examples Problems on Partnership 

Q1. A and B invested Rs(x+2000) and Rs(x+3000) respectively in a partnership. If profit at the end of the year is Rs 28000 and value of B’s share is Rs 16000, what is the value of x?(in Rs)

1. 1500
2. 1000
3.  2000
4.  500
5. 1200

Solution:
Ratio in which profit is distributed between A and B =(x +2000): (x+3000)

Q2. A, B, C and D enter into a partnership with an investment in the ratio 3 : 5 : 5 : 6 respectively. After four months, A and C increases their shares by 25% and 40% respectively and after next six months, D decreases his share by 50%. If at the end of year B gets 45000 from the total profit, then what is the difference between profit made by C and D?

a. Rs. 2000
b. Rs. 2500
c. Rs. 7500
d. Rs. 3500
e. None of these

Solution:

Q3. Arun and Balu started a business in partnership by investing the capital of Rs. 35000 and Rs. 40000 respectively. After six months, Charan also joined them with some capital. If at the end of the year, the profit share of Charan is Rs. 8000 out of the total profit of Rs. 23000, then find the amount invested by Charan.

1. Rs. 40000
2. Rs. 64000
3. Rs. 80000
4. Rs. 96000
5. None of these

Solution:

Let the investment of Charan be Rs. X.
Ratio of profits of Arun, Balu and Charan = 35000 × 12 : 40000 × 12 : X × 6
= 70000 : 80000 : X
According to question,

⇒(x / 7000+8000+x) = 8/23
⇒ 23X = 8X + 150000 × 8
⇒ 15X = 150000 × 8

Q4. Anil and Chandu enters into a partnership with the capital of Rs. 6000 and Rs. 8000 respectively. Chandu left the partnership 4 months before the end of the year. Find Chandu’s profit after a year if the total profit is Rs. 57800.

1. Rs. 26500
2. Rs. 27200
3. Rs. 34500
4. Rs. 22800
5. RS. 16700

Solution:

Q5. A and B enter into a partnership with capitals in the ratio of 3 : 4. At the end of 9 months B withdraws half of his capital. If profit share of A in the total profit was Rs 780, then what was total profit of the business ?

1. Rs 1290
2. Rs 1490
3. Rs 1890
4. Rs 1690
5. Rs 1590

Solution:

Q6. Pavan starts business with Rs.4500 and after 9 months, Qwaza joins with Pavan as his partner. After one year, the profit divided in the 3 : 5. What is Qwaza’s contribution in the capital?

1. Rs. 5,000
2. Rs. 10,000
3. Rs. 20,000
4. Rs.30,000
5. None of these

Solution:

Q7. P, Q, R hired Taxi for Rs. 680 and used it for 3, 5, 9 hours. respectively hire charges paid by Q are:

1. Rs 100
2. Rs 200
3. Rs 300
4. Rs 350
5. None of these

Solution:

Q8. ‘A’ started a business investing Rs. 45,000. After 3 months ‘B’ joined her with a capital of Rs. 60,000. After another 6 months ‘C’ joined them with a capital of Rs. 90,000. At the end of the year, they made a profit of Rs. 16,500. Find the share of ‘C’.

1. Rs. 2100
2. Rs. 3300
3. Rs. 3500
4. Rs. 3800
5. None of these

Solution:

These questions will help you understand how to answer partnership questions. We hope you like it.

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