Question

5. A and B are partners sharing profits in the ratio of 3:2. C is admitted as a new
partner for 1/5th share which he acquires from A and B in the ratio of 2 : 1. Calculate
new profit sharing ratio.
[2]​

Answer 1

Explanation:

Step 1: Calculation of Share of Incoming Partner Since C acquires 1/5th of his share from A, it means he acquires 4/5th (i.e. 1- 1/5th) of his share from B. If 4/5th shares = 4/25 1 share = 4/25 × 5/4=1/5

Step 2: Calculation of New Shares Share acquired by C : from A = 1/5 × 1/5 = 1/25, from B = 4/25 A's New Share = 3/5 - 1/25 = 14/25, B’s New Share = 2/5 - 4/25 = 6/25

Step 3: New Profit Snaring Ratio of A, B and C = 14/25 : 6/25 : 5/25 =14:6:5

Step 4: Sacrificing Ratio of A and B = 1/25: 4/25 =1:4.