In
order to clearly determine how Albert, Billy and Cathy share the profits and
losses of their partnerships, we can convert the ratios into fractions. We do
this by adding total ratio terms to get the whole. For example the total that
is derived from the ratio 1:4:3 is 1+4+3 which gives 8. Since we have been
given the profit that is to be shared between the three partners, all we have
to do is multiply the total profit ($30,000) by each person's fraction.
Albert's share of the profits is (1/8*30000) which gives $3750.
