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A and B have claims on interest on capital in the ratio 4 : 1. Available profit is Rs 50,000 and the total claim amount is Rs 75,000. How much will A receive?

Answer and explanation

Correct answer: Rs 40,000

Profit is shared in the ratio of claims. With ratio 4:1 the total parts = 5, so A’s share = 4/5. Therefore A = (4/5) × Rs 50,000 = Rs 40,000. Alternate check: A’s claim of total Rs 75,000 = (4/5)×75,000 = Rs 60,000, so A’s share = (60,000/75,000)×50,000 = Rs 40,000. Why distractors are wrong: Rs 30,000 or Rs 10,000 correspond to incorrect fractions (e.g. 3/5 or 1/5), and Rs 50,000 would mean giving entire profit to A. Exam tip: convert the ratio into fractional share (part/total parts) before multiplying by available profit.

Related tags

Partnership AccountsProfit DistributionInterest On CapitalRatio ProblemsClass 12 AccountancyPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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