Partners A and B have capital ₹50,000 and ₹70,000 respectively and profit share ratio 5:3. After 6 months, the partnership earned ₹12,000 profit and incurred ₹4,000 loss. What is the loss borne by each partner?
Answer
A pays ₹2,500; B pays ₹1,500
The correct answer is A pays ₹2,500; B pays ₹1,500 — B’s share = 3/8 × ₹4,000 = ₹1,500.
Step-by-step solution
- Calculate net loss: ₹4,000 loss – ₹12,000 profit = ₹4,000 net loss.
- Divide net loss in the ratio 5:3: total parts = 5+3 = 8.
- A’s share = 5/8 × ₹4,000 = ₹2,500.
- B’s share = 3/8 × ₹4,000 = ₹1,500.
Common mistake: Adding profit and loss without determining net loss or ignoring loss distribution
Concept tested: Loss allocation in partnership
Published · How this solution was prepared and checked
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