a and b are partners sharing profit and loss in the ratio of 5:3. they admit c as a new partner with 1/4 share of profit and loss. calculate new profit sharing ratio of a b and c if c acquired his share 1/5th from a and 1/20th from b
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Old ratio (A and B) = 5 : 3
C is admitted for 3/10th share of profit
A's sacrifice in favour of C = 1/5
B's sacrifice in favour of C = 1/10
New ratio = Old ratio - Sacrifcing ratio
A's new ratio = (5/8) - (1/5) = 17/40
B's new ratio = (3/8) - (1/10) = 11/40
C's share = 3/10 or 12/40
Therefore, new profit sharing ratio of A : B : C is 17 : 11 : 12
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