Ray's New Practical Arithmetic · Arts. 226–228 · Unit 23: Partnership, Equation of Payments and Average
106. Partnership, bankruptcy and general average
Goal: Your child divides a gain or loss among partners in proportion to what each put in, and uses the same idea for a bankrupt's debts and losses at sea.
You'll need
- Paper and pencil, or a slate or small whiteboard
What's in the book
Page 291 defines Partnership (Art. 226) and starts an example. Page 292 finishes it, gives the rule and problems. Page 293 covers Bankruptcy (Art. 227) and General Average (Art. 228), with one more problem on page 294. Answers are printed.
The lesson, step by step
Warm-up
Ask: You put in $2 and a friend puts in $3 to buy lemonade supplies. You earn $10. What is a fair way to share it?
The words
A Partnership is an association of persons for the transaction of business.
The capital, or stock, is the amount of money or property contributed by the firm.
The liabilities of a firm are its debts.
The net capital is the difference between the assets and liabilities.
Work the book's example
A and B engaged in trade; A's capital was $200; B's, $300; they gained $100: find each partner's share.
The whole capital is $500. A owns 2/5 and B 3/5, so A gets $40 and B $60.
Take such part of the whole gain or loss, as each partner's stock is part of the whole stock.
Bankruptcy and general average
A Bankrupt is one who has failed to pay his debts when due.
His property is shared among the people he owes, so many cents on each dollar of debt.
General Average is the method of apportioning among the owners of a ship and cargo, losses occasioned by casualties at sea.
If goods were thrown overboard to save the ship, everyone shared the loss.
Guided practice
Do these together:
A's stock was $70; B's, $150; C's, $80; they gained $120: what was each man's share of it?
Divide $90 among 3 persons, so that the parts shall be to each other as 1, 3, and 5.
Independent practice and check
Your child works a selection of the partnership, bankruptcy and general average problems on pages 292–294. The book prints the answer at the end of each problem line. Have your child cover the answers with a strip of paper, work the problem, then slide the strip down to check.