L and B agree to share profits and losses in the ratios 8:2. If the net loss is $25 000, how much loss is allocated to each partner?
A) L $20 000; B $5000
B) L $5000; B $20 000
C) L $16 000; B $9000
D) L $23 000; B $2000

Question

Quizplus · Accepted Answer

First, we need to find the total ratio which is 8+2=10. 
Then, we can find L's share of the loss by multiplying the total loss by L's ratio: 
8/10 x $25,000 = $20,000 
And B's share of the loss by multiplying the total loss by B's ratio: 
2/10 x $25,000 = $5,000 
Therefore, the correct answer is A.

L and B Agree to Share Profits and Losses in the Ratios