Terry And Hill can develop a method of profit sharing on below factors Unequal capital contribution Compensate by paying interest on capital - Compensate for the uneven contributions towards capital by paying interest on their capital contributions. Greater the Capital contributed, greater the interest earned. This would set right the difference in contributions in the form of capital. Profit equal to the total \"Interest on Capital\" on all the capital of the firm is set aside and is distributed to the partners in the ratio of their capitals.Rest of the profits can be shared equally if all other contributions are equal. Unequal time and efforts - Compensate by paying Salary to Partner. - Compensate for the uneven contributions of time and efforts towards the firm by paying salary to partner. The salary paid to Hill would be compensation for his greater contribution. Profit equal to the total \"Salary to Partners\" to all the partners who have made a contribution in this respect is set aside and is distributed to them in proportion to the value of their contributions as agreed upon between partners. Rest of the profits can be shared equally if all other contributions are equal. and if terry and hill are not interested in compensating by above methods then profit sharing by effort in running the partnership is more preferable as its helping in generating income of partnership. Solution Terry And Hill can develop a method of profit sharing on below factors Unequal capital contribution Compensate by paying interest on capital - Compensate for the uneven contributions towards capital by paying interest on their capital contributions. Greater the Capital contributed, greater the interest earned. This would set right the difference in contributions in the form of capital. Profit equal to the total \"Interest on Capital\" on all the capital of the firm is set aside and is distributed to the partners in the ratio of their capitals.Rest of the profits can be shared equally if all other contributions are equal. Unequal time and efforts - Compensate by paying Salary to Partner. - Compensate for the uneven contributions of time and efforts towards the firm by paying salary to partner. The salary paid to Hill would be compensation for his greater contribution. Profit equal to the total \"Salary to Partners\" to all the partners who have made a contribution in this respect is set aside and is distributed to them in proportion to the value of their contributions as agreed upon between partners. Rest of the profits can be shared equally if all other contributions are equal. and if terry and hill are not interested in compensating by above methods then profit sharing by effort in running the partnership is more preferable as its helping in generating income of partnership..