2. A and B were partners in a firm sharing profits in 3 : 2 ratio. They admitted C and D as new partners. A sacrificed 1/3 of his share in favour of C and B sacrificed' 1/3 from his share in favour of D. Calculate the new profit sharing ratio of A, B, C and D.
Answers
Answer:
Old ratio (A and B) = 3 : 2
C is admitted for 1/5 th share
A's sacrifice in favour of C = (1/5) * (1/2) = (1/10)
B's sacrifice in favour of C = (1/5) * (1/2) = (1/10)
New ratio = Old ratio - Sacrificing ratio
A's new ratio = (3/5) - (1/10) = 5/10 or 1/5
B's new share = (2/5) - (1/10) = 3/10
C's share = A's sacrifice + B's sacrifice
= (1/10) + (1/10)
= 2/10
Therefore, new profit sharing ratio of A, B and C is 5 : 3 : 2
Explanation:
Old ratio (A and B) = 3 : 2
C is admitted for 1/5 th share
A's sacrifice in favour of C = (1/5) * (1/2) = (1/10)
B's sacrifice in favour of C = (1/5) * (1/2) = (1/10)
New ratio = Old ratio - Sacrificing ratio
A's new ratio = (3/5) - (1/10) = 5/10 or 1/5
B's new share = (2/5) - (1/10) = 3/10
C's share = A's sacrifice + B's sacrifice
= (1/10) + (1/10)
= 2/10
Therefore, new profit sharing ratio of A, B and C is 5 : 3 : 2