Jack and Jill Repairers is founded by partners Jack, Jill and Jolly. Jack, Jill and Jolly contributed $3000, $5000 and $8000 respectively. For the year ending 31 December, Jack and Jill Repairers produced a profit of $12 000. If the profits are distributed in accordance with the initial investment which of the following is true?

Question

Quizplus · Accepted Answer

The total initial investment is $3000 + $5000 + $8000 = $16000 
The profit distribution is based on the ratio of each partner's initial investment to the total initial investment:

- Jack's ratio = $3000/$16000 = 0.1875 
- Jill's ratio = $5000/$16000 = 0.3125 
- Jolly's ratio = $8000/$16000 = 0.5

To find out the profit distribution, we multiply each partner's ratio by the total profit:

- Jack's share = 0.1875 x $12000 = $2250 
- Jill's share = 0.3125 x $12000 = $3750 
- Jolly's share = 0.5 x $12000 = $6000

Therefore, the correct answer is C: Jack gets $2250 and Jill gets $3750.

Jack and Jill Repairers Is Founded by Partners Jack, Jill