Partnership

Important Facts:

Partnership:When two or more than two persons run a business
jointly, they are called partners and the deal is known as partnership.

Ratio of Division of Gains:

1.When the investments of all the partners are do the same time, the
gain or loss is distributed among the partners in the ratio of their
investments.

Suppose A and B invest Rs x and Rs y respectively for a year in a
business, then at the end of the year:
(A's share of profit):(B's share of profit)=x:y

2.When investments are for different time periods, then equivalent
capitals are calculated for a unit of time by taking (capital*number
of units of time). Now gain or loss is divided in the ratio of these
capitals.

Suppose A invests Rs x for p months and B invests Rs y for q months,
then (A's share of profit):(B's share of profit)=xp:yq

3.Working and sleeping partners:A partner who manages the business is
known as working partner and the one who simply invests the money is
a sleeping partner.

Formulae

1.When investments of A and B are Rs x and Rs y for a year in a
business ,then at the end of the year
(A's share of profit):(B's share of profit)=x:y

2.When A invests Rs x for p months and B invests Rs y for q months,
then A's share profit:B's share of profit=xp:yq