Shortcut Trick
Initial capital ratio = 5 : 3. Since A's capital = ₹50,000, B's = ₹30,000.
Equivalent capital of A = (50k × 6) + (40k × 6) = 540k
Equivalent capital of B = (30k × 6) + (60k × 6) = 540k
Profit ratio = 540k : 540k = 1 : 1
Profit share of A = (1 ÷ 2) × ₹84,000 = ₹42,000
∴ The correct answer is ₹42,000.
Alternate Method
Given:
Initial capital ratio of A : B = 5 : 3
Initial capital of A = ₹50,000
Total profit after 1 year = ₹84,000
Formula Used:
Profit Ratio = (CapitalA × TimeA) : (CapitalB × TimeB)
Partner A's Timeline₹50,000 × 6m₹40,000 × 6mPartner B's Timeline₹30,000 × 6m₹60,000 × 6mTotal Equivalent Capitals: A = ₹5,40,000 | B = ₹5,40,000
Calculations:
⇒ Initial capital of A = 5 units = ₹50,000
⇒ 1 unit = ₹50,000 ÷ 5 = ₹10,000
⇒ Initial capital of B = 3 units = 3 × ₹10,000 = ₹30,000
⇒ After 6 months, A withdraws ₹10,000, so new capital = ₹50,000 − ₹10,000 = ₹40,000
⇒ After 6 months, B doubles his investment, so new capital = ₹30,000 × 2 = ₹60,000
⇒ Equivalent capital of A = (₹50,000 × 6) + (₹40,000 × 6) = ₹3,00,000 + ₹2,40,000 = ₹5,40,000
⇒ Equivalent capital of B = (₹30,000 × 6) + (₹60,000 × 6) = ₹1,80,000 + ₹3,60,000 = ₹5,40,000
⇒ Ratio of profit share = 5,40,000 : 5,40,000 = 1 : 1
⇒ Sum of profit ratios = 1 + 1 = 2 units
⇒ A's profit share = (1 ÷ 2) × ₹84,000 = ₹42,000
∴ The correct answer is ₹42,000.
Additional Information
Compound Partnership
When capitals are invested for unequal time periods, profits are shared in the ratio of the product of capital and time, known as equivalent capital.
Simple Partnership
When partners invest their capitals for the exact same period, the profit is purely distributed in the respective ratio of their original investments.
Working vs Sleeping Partner
A working active partner manages the business and usually receives a salary or fixed percentage of profit. A sleeping partner only provides funds and gets a share solely based on capital and time ratio.