Quantitative - Partnership

Partnership Description

Partnership:- When two or more than two persons runs business jointly by investing money, they are called Partners and deal is known as partnership.
Example:- Suppose Swati and Kanika invest Rs 24000 and Rs 36000 respectively. At the end of the year, the gain will be distributed among them in the ratio of 24000:36000 i.e. 2:3.

Working and Sleeping partners: -  When a partner manages the business that is called working partner and the partner simply investing the money is called the Sleeping partner.

Rules of Partnership:-

(i) If the capital of the partners are invested for same period. It is simple. The gain or loss is distributed among them in ratio of investment, then for each of them we calculate capital as (capital * number of units of time).
For eg:-
Let sham invest Rs 3000 for 4 months and Rs 2000 for 8 months.
Let Mohan invest Rs 2000 for 7 months and Rs 4200 for 5 months. Then sham : Mohan = (3000*4+2000*8) : (2000*7+4200*5) = 28000: 35000 = 4:5.

(ii) If the capital of the partners are invested for different time period. It is compound.
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