In financial partnership, two or more people come together to invest in a business. Profits accruing from the investment are usually shared in proportion or ratio to the contributions of the partners.
EXAMPLE
Three partners Ali, John and Ama invested $25,000, $15,000 and $35,000 respectively in a joint venture. If they shared $ 150,00 in the ratio of their investment, how much did each receive?
Solution
The profit is shared in the proportion to their investment.
Thus Ali : John : Ama = $25,000 : $ 15,000 : $ 35,000
= $25 : 15 : 35/1000
The profit shared = $150,000
Therefore Ali's profit = 25 × $150,000
¯¯¯¯¯¯¯¯¯¯¯
25 + 15 + 35
= $50,000
John's profit = 15/75 × $150,000
= $30,000
Ama's profit = [$150,000( $50,000 + $30,000)]
= ($150,000 - $80,000)
= $70,000
Example 2
Three partners ,Musa Joseph and Amadu invested $10,500, $21,000 and $31,500 respectively on a joint venture, with the understanding that any profit or loss accruing from the venture will be shared in proportion to the amounts invested. At the end of the year, the partners shared a profit of $18000. How much did each receive?
Solution
The profit is shared in the proportion ( or ratio ) to their investment. Thus Musa : Joseph : Amadu = 10500 : 2100 : 31500
=105 : 210 : 315 ( divide through by 100 ).
The profit at the end of the year = $ 18,000.
Therefore Musa's profit = 105/105+210+315 × $18000= 105/630 ×$18000=$3,000
Joseph's profit =210/630 × $18000= $6,000
Amadu's profit = $[ 18000- (6,000+3,000)] = $(18,000 - 9,000)
=$9,000
ASSIGNMENT
Three workers Mr Aseidu, Mr Amoako and Mr Atsu hold 120, 200 and 40 shares respectively in their company. A total dividend of $18,000,000 is paid to the three workers in the same ratio as their shares. How much does each worker receive?
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