On 1st April 1996 X,Y and Z started a business in partnership. X contributes 90000 at first but then withdraws 30000 at the end of the 6 months Y introduces 75000 at first & increases it to 90000 at the end of four months but withdraws 30000 at the end of 9 monthZ brings in 75000 at first but increases it by 60000 by the end of 7 months.During  the year ending 31 march 2007 the net profit is 42000.show how the partners should divide the amount in the basis of capital employed by each partner.

(1) Calculation of Capital Ratio

 Total Capital Employed by X Date Capital (Rs) Months for which capital was employed in the business Product (Rs) 01/04/2015 90,000 6 5,40,000 30/09/2015 60,000 (90,000 – 30,000) 6 3,60,000 9,00,000

 Total Capital Employed by Y Date Capital (Rs) Months for which capital was employed in the business Product (Rs) 01/04/2015 75,000 4 3,00,000 31/07/2015 90,000 (75,000+15,000) 5 4,50,000 31/12/2015 60,000 (90,000 – 30,000) 3 1,80,000 9,30,000

 Total Capital Employed by Z Date Capital (Rs) Months for which capital was employed in the business Product (Rs) 01/04/2015 75,000 7 5,25,000 31/10/2015 1,35,000 (75,000+60,000) 5 6,75,000 12,00,000

So capital ratio of X, Y and Z is 9,00,000:9,30,000:12,00,000 or 30:31:40.

(2) Distribution of Profit

Profit of Rs 42,000, is distributed between X, Y and Z in the ratio of 30:31:40.

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