If Partner A contributes 60% of the capital and Partner B contributes 40%, how should profits be divided if they agree to split them based on capital contribution?
Practice Questions
1 question
Q1
If Partner A contributes 60% of the capital and Partner B contributes 40%, how should profits be divided if they agree to split them based on capital contribution?
60% to A and 40% to B
50% to A and 50% to B
70% to A and 30% to B
40% to A and 60% to B
Profits should be divided in accordance with their capital contributions, so A receives 60% and B receives 40%.
Questions & Step-by-step Solutions
1 item
Q
Q: If Partner A contributes 60% of the capital and Partner B contributes 40%, how should profits be divided if they agree to split them based on capital contribution?
Solution: Profits should be divided in accordance with their capital contributions, so A receives 60% and B receives 40%.
Steps: 5
Step 1: Identify the total capital contributions of both partners. Partner A contributes 60% and Partner B contributes 40%.
Step 2: Understand that profits will be divided based on the percentage of capital each partner contributed.
Step 3: Since Partner A contributed 60%, they will receive 60% of the profits.
Step 4: Since Partner B contributed 40%, they will receive 40% of the profits.
Step 5: Conclude that the profits should be divided as follows: Partner A gets 60% and Partner B gets 40%.
