Question

11. A and B share profits and losses in the ratio of 3:2. They admit C as a newIrd share in the profits of the firm which he acquired from A and B in thepartner for rd share i2.3. After some time, they admitted D as a new partner for th share in theprofits which he acquired equally from A and C.Calculate :(1) New profit sharing ratio of A, B and C;(ii) New profit sharing ratio of A, B, C and D.​

Answer 1

A's old ratio= 2/7

B's old ratio= 5/7

C is admitted for 1/4th share.

Remaining share= 1-[1/4]

= 3/4

A's new share= 3/4 * 2/7

= 6/28

B's new share= 3/4 * 5/7

= 15/28

New Profit sharing ratio of partners= 6:15:7

(ii) Distribution of Goodwill:

A's share= 2/7 * 14000

= 4000

B's share= 5/7 * 14000

= 10000