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A and B capitals should be in the ratio 2:3. Total capital is Rs 2,50,000. What is B's target capital?

Answer and explanation

Correct answer: Rs 1,50,000

The governing concept is proportional allocation of total capital according to the prescribed capital ratio. The ratio 2:3 contains 2 + 3 = 5 total parts. Therefore, the value of one part is Rs 2,50,000 ÷ 5 = Rs 50,000. B is assigned three parts, so B's target capital is 3 × Rs 50,000 = Rs 1,50,000. Thus, option A is correct. Option B represents only two parts, which belongs to A, while option C exceeds B's three-part share and option D represents only one part. The calculation also confirms that A's capital would be Rs 1,00,000 and both capitals together would equal Rs 2,50,000.

Related tags

Capital RatioTarget CapitalPartnership AccountsCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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