Ray's New Higher Arithmetic · Arts. 356–357 · Unit 23: Partnership
102. Partnership: shares for the same time
Goal: Your student divides a gain or loss among partners in proportion to what each put in.
You'll need
- The book
- A slate, small whiteboard or scrap paper
- A notebook and pencil
What's in the book
Chapter XVII: definitions (partnership, capital, assets, liabilities, simple and compound partnership), the principle, Case I with a worked example, a rule and examples. Answers are printed.
The lesson, step by step
Warm-up
Ask: You put in $3 and your sister $1 to buy lemons. You make $8. What is a fair split? ($6 and $2.)
The idea
Read:
Partnership is the association of two or more persons in a business of which they are to share the profits and the losses.
The persons associated are called partners; together they constitute a Firm, Company, or House.
Gains and losses are shared in proportion to the sums invested and the periods of investment.
Work the book's example
A, B, and C are partners, with $3000, $4000, and $5000 stock, respectively; if they gain $5400, what is each one's share?
The whole is $12000. A owns 3/12, B 4/12 and C 5/12. So A gets $1350, B $1800 and C $2250.
The rule
Read:
Divide the gain or loss among the partners in proportion to their shares of the stock.
Guided practice
A and B gain in one year $3600; their store expenses are $1500. If A's stock is $2500 and B's $1875, how much does each gain?
First take out the expenses: $2100 to divide.
Independent practice and check
Your student works the other examples, including the one where C is paid a salary first. Check the printed answers.
Wrap-up
Ask: How can you check a division of profit? (The shares must add up to the whole gain.)