Question

John, Sally and Jane form a partnership. The partnership earns a $70,000 profit. Partners share profits by previous year’s capital balance. Capital balances were $100,000 for John, $75,000 for Sally and $225,000 for Jane. Jane’s share of this year’s profit is:
Multiple Choice
$17,500
$13,125
$39,375
$35,000

Answer 1

Jane's share in the profit as per the amount invested by her is $39,375.

What is a Ratio?

A ratio shows us the number of times a number contains another number.

Given that Capital balances were $100,000 for John, $75,000 for Sally and $225,000 for Jane. Therefore, the ratio of the capital invested by three can be written as,

John : Sally : Jane = $100,000 : $75,000 : $225,000

John : Sally : Jane = 4 : 3 : 9

Now, the profit will be shared as per the capital invested, therefore, as per the capital invested. Thus, we can write,

4x + 3x + 9x = $70,000

16x = $70,000

x = $70,000 / 16

x = $4,375

Further, Jane's share can be written as,

Jane's share = 9x

                     = 9 × $4,375

                     = $39,375

Hence, Jane's share is $39,375.

Learn more about Ratios here:

brainly.com/question/1504221

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