Question

A and B are Partner sharing Profits in the ratio of 3:1 . Thay admit C for 1/4 share in the future profit. calcubte new profit sharing rotio of A,B and C and sacrificing ratio of A and B​

Answer 1

Answer:

New Profit Sharing Ratio = 5:1:2 , Sacrifice Ratio = 1:1.

Explanation:

A's old share = 3/4, B's old share = 1/4. C gets 1/4th share by taking 1/8th from A and 1/8th from B (since no information is given as to how C is given such share, it is assumed that the existing partners gave the share equally). Thus, A's new share is (3/4)-(1/8) = (6/8)-(1/8) = 5/8. Similarly, B's new share is (1/4)-(1/8) = (2/8)-(1/8) = 1/8. C's share is 1/4 = 2/8. New PSR= 5/8:1/8:2/8 = 5:1:2. A's sacrifice = A's old share - A's new share = 3/4 - 5/8 = 6/8 - 5/8 = 1/8. B's sacrifice = B's old share - B's new share = 1/4 - 1/8 = 2/8 - 1/8 = 1/8. Thus, sacrifice ratio = 1/8:1/8  = 1:1.