Question

A and b started a business with rs. 20,000 and rs. 35,000 respectively. they agreed to share the profit in the ratio of their capital c joins the partnership with the condition and lays rs. 2,20,000 as premium for this, be shared between a and

b. this is to divided between a and b in the ratio of

Answer 1

Answer:

Step-by-step explanation :

Here the term PREMIUM needs to be understood.

Well, when a new partner joins a business he must be sharing some part of profit. Means the old owner or owners will be sacrificing his share/s to the extent new partner will be getting.

Therefore they need to be compensated with some amount (Which is determined by the consent of all the partners including the new one). That amount is called PREMIUM, which is to be brought by the new partner in addition to his share of capital (investment in the business).

Obviously that amount will be shared by the old partners in their SACRIFICING ratio.

Now look how to calculate the sacrificing ratio:

Old ratio of A & B 20,000 : 35,000 = 4 : 7 (They share profit in the ratio of their capitals)

So A's share is 4/11 & B's share is 7/11

New Share of A will be 1/3 & B's 1/3 also (As all the three partners will be sharing profit equally)

Now we have to find their sacrificing shares and then the ratio.

Now A's sacrifice = Old share -- New share =>>> 4/11 -- 1/3 = 1/33 & B's sacrifice = 7/11 -- 1/3 = 10/33

Hence the ratio in which the premium is be divided between A and B is 1 : 10 ✔✔✔