A and B are partners in a firm sharing profits and losses in the ratio of 3: 2.
I surrenders 1/5th of his share, whereas B surrenders 2/5th of his share in favour of C, the
z partner. Calculate new profit-sharing ratio.
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Answer:
NEW PROFIT SHARING RATIO OF A : B : C = 12/25 : 6/25 : 7/25
⇒ A : B : C = 12 : 6 : 7
Explanation:
A'S OLD RATIO = 3/5 A SURRENDER IN FAVOR OF C = 3/5 × 1/5 = 3/25
A'S NEW SHARE = 3/5 - 3/25 = 12/25
B'S OLD RATIO = 2/5 B SURRENDER IN FAVOR OF C = 2/5 × 2/5 = 4/25
B'S NEW SHARE = 2/5 - 4/25 = 6/25
C'S NEW SHARE = 3/25 + 4/25 = 7/25
NEW PROFIT SHARING RATIO OF A : B : C = 12/25 : 6/25 : 7/25
⇒ A : B : C = 12 : 6 : 7
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