A and B are partners sharing profit and losses equally they admit C into partnership by giving him a four square in future profit which year quotes from A and B in the ratio of 3 is to 2 find out the new profit sharing ratio
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A's sacrifice in favour of C = (1/5) * (1/2) = (1/10)
B's sacrifice in favour of C = (1/5) * (1/2) = (1/10)
New ratio = Old ratio - Sacrificing ratio
A's new ratio = (3/5) - (1/10) = 5/10 or 1/5
B's new share = (2/5) - (1/10) = 3/10
C's share = A's sacrifice + B's sacrifice
= (1/10) + (1/10)
= 2/10
Therefore, new profit sharing ratio of A, B and C is 5 : 3 : 2
December 26, 2019
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