‘A’ and ‘B’ entered a joint venture. ‘A’ brought ₹1,50,000 and ‘B’ ₹2,00,000. ‘A’ also contributed skilled labor equivalent to ₹50,000. At the end of the year, they earned ₹1,20,000 in profit. If they agreed to divide the profit in proportion to their effective contributions, what was A’s share?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹60,000.
A’s effective contribution = 1,50,000 + 50,000 = ₹2,00,000
B’s contribution = ₹2,00,000
Ratio = 2,00,000 : 2,00,000 = 1 : 1
Total profit = ₹1,20,000
A’s share = = ₹60,000