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A and B capitals are Rs 150000 and Rs 100000. Profit ratio is three to two. Are capitals already in ratio?

Answer and explanation

Correct answer: Yes capitals are in three to two

The direct answer is A: yes, the capitals are already in the ratio 3:2. Start by writing the capital ratio as 150000:100000. Divide both terms by 50000: 150000 ÷ 50000 = 3 and 100000 ÷ 50000 = 2. Therefore the ratio is 3:2, exactly the same as the profit-sharing ratio. No partner has to bring or withdraw money. Option A is correct because it states this exact result. Option B is wrong because 150000:100000 does not simplify to 2:3; that would reverse the partners. Option C is wrong because the capitals are not equal: A has 50000 more than B. Option D is wrong because A does not need to bring 50000; the existing capitals already match the required ratio. Remember: simplify the capital ratio before deciding on adjustment.

Related tags

Capital RatioProfit RatioNo Adjustment

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