A and B began business with Rs. 3000 and Rs. 4000. After 8 months, A withdraws…

2025

A and B began business with Rs. 3000 and Rs. 4000. After 8 months, A withdraws Rs. 1000 and B advances Rs. 1000 more. At the end of the year, their profits amounted to Rs. 630. Find the share of A.

  1. A.

    Rs. 240

  2. B.

    Rs. 75

  3. C.

    Rs. 125

  4. D.

    Rs. 354

Show answer & explanation

Correct answer: A

In a partnership where a partner's capital changes during the year, profit is not shared in the simple ratio of the initial capitals -- it is shared in the ratio of each partner's equivalent (time-weighted) capital, found by multiplying the capital invested by the number of months it stayed invested, and summing this across every period of the year.

  1. A invests Rs. 3000 for the first 8 months, then withdraws Rs. 1000, leaving Rs. 2000 invested for the remaining 4 months of the year.

  2. A's equivalent capital = (3000 x 8) + (2000 x 4) = 24000 + 8000 = 32000.

  3. B invests Rs. 4000 for the first 8 months, then advances Rs. 1000 more, taking the investment to Rs. 5000 for the remaining 4 months.

  4. B's equivalent capital = (4000 x 8) + (5000 x 4) = 32000 + 20000 = 52000.

  5. The profit-sharing ratio of A to B is 32000 : 52000, which simplifies to 8 : 13.

  6. A's share of the total profit of Rs. 630 = 630 x 8 / (8 + 13) = 630 x 8 / 21 = Rs. 240.

Cross-check: B's share = 630 x 13 / 21 = Rs. 390, and Rs. 240 + Rs. 390 = Rs. 630, which equals the total profit -- confirming the split is correct.

Therefore, A's share of the profit is Rs. 240.

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