Question

A and B are partners sharing profits and losses in the ratio of 3:2. C is admitted for 1/5 share in profits which he gets from A. New profit sharing ratio will be: a) 12:8:5 b) 8:12:5 c) 2:2:1 d) 2:2:2​

Answer 1

Explanation:

Old ratio (A and B) = 3 : 2

C is admitted for 1/5 th share

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