Question

On 1.01.2014 Rohit and Shobhit started a business with capitals of 40,000 and Rs. 80,000 respectively. They agreed to share the profits and losses in the ratio of their capitals. They earned a profit of Rs. 40,000 in that year. Following are the details of additional capital introduced or withdrawn by the partners during the year 2014:

Answer 1

Computation of Total capital employed by Rohit for One Month

Capital	Months for which capital remained in the business	Product
40,000	3	1,20,000
45,000	2	90,000
37,000	5	1,85,000
34,000	2	68,000
		4,65,000

Computation of Total capital employed by Shobhit for One Month

Capital	Months for which capital remained in the business	Product
80,000	3	1,60,000
70,000	2	1,40,000
76,000	5	3,80,000
81,000	2	1,62,000
		8,42,000

On the basis of capitals, profits are to be shared in the ratio of 465 : 842.

The profit of Rs. 40,000 will be shared as follows:

Rohit: (40,000 X 465/1307) = Rs. 14,231

Shobhit: (40,000 X 842/1307) = Rs. 25,769