Question

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. C is admitted for 1/4th share in profits of the firm. Calculate new profit sharing ratio of the partners.​

Answer 1

Explanation:

Old Ratio :

A : B = 3 : 2

A = 3/5

B = 2/5

C is admitted for 1/4th share in profits of the firm

suppose,

whole profit of all Partners = 1

1 - 1/4 = 3/4

New Share :

• A =

3/4 × 3/5 = 9/20

New Share of A = 9/20

• B =

3/4 × 2/5 = 6/20

New Share of B = 6/20

• C = 1/4

1 × 5/4 × 5 = 5/20

New Share of C = 5/20

A : B : C = 9/20 : 6/20 : 5/20

= 9 : 6 : 5

Hence, new profit sharing ratio of the partners is 9:6:5

Answer 2

Explanation:

Solution :

★ Old Ratio :

A : B = 3 : 2

• A = $\dfrac{3}{5}$

• B = $\dfrac{2}{5}$

C is admitted for 1/4th share in profits of the firm

• C 's Share = $\dfrac{1}{4}$

Let,

Total Share of all Partners in a firm = 1

• C 's Share = $\dfrac{1}{4}$

Remaining Share =

$1 \: - \: \dfrac{1}{4} \: = \: \dfrac{3}{4}$

★ New Profit Sharing Ratio :

A's New Share =

$\longrightarrow\:\dfrac{3}{5} \: \times \: \dfrac{3}{4} \: = \: \dfrac{9}{20}$

$\longrightarrow\:\dfrac{9}{20}$

A's New Share = $\dfrac{9}{20}$

B's New Share =

$\longrightarrow\:\dfrac{2}{5} \: \times \: \dfrac{3}{4} \: = \: \dfrac{6}{20}$

$\longrightarrow\:\dfrac{6}{20}$

B's New Share = $\dfrac{6}{20}$

C's Share =

$\longrightarrow\:\dfrac{1}{4} \: = \: \dfrac{(1 \: \times \: 5)}{(4 \: \times \: 5)} \: = \: \dfrac{5}{20}$

C's Share = $\dfrac{5}{20}$

★ New Profit Sharing Ratio =

• A : B : C

• $\dfrac{9}{20} : \dfrac{6}{20} : \dfrac{5}{20}$

$\longrightarrow$ 9 : 6 : 5

Therefore, New Profit Sharing Ratio of A : B : C = 9 : 6 : 5.