Question

A and B have capital of 30000 and 40000 and they share profit in capital ratio. As per agreement interest on capital is allowed as a charge even if it involves losses. The firm sustain loss of 3500 and the rate of interests is 10% p.a . Show distribution of loss/profit.​

Answer 1

Answer:

distribution of loss of 3500 among A and B in the capital ratio (i.e., 3:4)

Explanation:

share of A =3500*3/7=1500

share of B=3500*4/7=2000