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Ryan
Ryan, Engineer
Category: Math Homework
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Experience:  B.S. in Civil Engineering
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There are two partners in a business. total earned in the

Customer Question

there are two partners in a business. total earned in the year is £90588. total expenses in the year are £93470. Partner a earns £61493 and has expenses of £ 29837. partner b earns £ 29095 and has expenses £63633.
what does partner a owe partner b ?
Submitted: 1 month ago.
Category: Math Homework
Expert:  Ryan replied 1 month ago.

Hi,

Thank you for using the site. I'll be happy to help you with this if I can.

Do you have any additional information regarding the terms of the partnership? Is there any chance that specific knowledge of laws concerning partnerships in the UK is required?

Is this problem from a math course?

Thanks,

Ryan

Customer: replied 1 month ago.
the business is a 50% PARTNERSHIP. There is no need for specific knowledge of laws or such like.
this is not from a maths course. A needs to know what is owed to b.
Expert:  Ryan replied 1 month ago.

Ok.

Assuming that the 50% partnership means that they share total earnings and expenses equally, then the calculation would look like this.

Note that I am also assuming that each partner has retained their own earnings, and has paid their own expenses, and they are now "settling up" the account to balance things out.

Total income is £ 90588, which means that each should receive £ 90588 / 2 = £ 45294.

Partner B's income is short by £ 45294 - £ 29095 = £ 16199

Similarly, each should be accountable for half of the total expenses, or £ 93470 / 2 = £ 46735

Partner B has overpaid expenses by £ 63633 - £ 46735 = £ 16898

Partner A would need to make up for Partner B's shortfall in income, and Partner B's over-payment of expenses.

Partner A thus owes Partner B a total of: £ 16199 + £ 16898 = £ 33097

Please feel free to ask if you have any questions about this solution.

Thanks,

Ryan