Question

A, B and C are three associates in a firm. A invests Rs. 6,000, B invests Rs. 9,000 and C invests Rs. 12,000. A and B are the working partners and get 10% and 20% of the profit respectively as their salary, and the remaining profit is distributed in the ratio of their capitals. If the profit made at the end of the year is Rs. 27,000, then what is the share of A?

• A. Rs. 2,300
• B. Rs. 3,900
• C. Rs. 6,900
• D. Rs. 8,400
• E. Rs. 12,300

Hint:

First deduct the two salaries from the total profit, then split only what remains in the ratio of capitals.

Answer 1

The Correct Option is C

Total profit = Rs. 27,000.

Step 1: Salaries taken off the top.
A's salary = 10% of 27,000 = Rs. 2,700
B's salary = 20% of 27,000 = Rs. 5,400
These are paid to A and B first, before the remaining profit is split by capital.

Step 2: Remaining profit.
Remaining = 27,000 - 2,700 - 5,400 = Rs. 18,900
This remaining amount is distributed among A, B and C strictly in proportion to their capital contributions.

Step 3: Capital ratio.
A : B : C = 6,000 : 9,000 : 12,000 = 2 : 3 : 4 (dividing through by 3,000)
Total parts = 2 + 3 + 4 = 9

Step 4: A's share of the remaining profit.
A's share = 18,900 x (2/9) = Rs. 4,200

Step 5: A's total share.
A's total = salary + share of remaining = 2,700 + 4,200 = Rs. 6,900

So A's total share of the profit is Rs. 6,900, which is option (c).