A and B were partners in a firm sharing profits and losses in the ratio of 3:2 they admit c into the partnership with 1/6 share in the profits. calculate the new profits sharing ratio.
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Answer:
New profit sharing ratio between A,B and C = 3 : 2 : 1.
Explanation:
Solution :
★ Old Ratio :
A : B = 3 : 2
- A's Share = 3/5
- B's Share = 2/5
They admit C into the partnership with 1/6 share in the profits.
- C's Share = 1/6
Let,
Total Profit of all Partners in the firm = 1
So,
Remaining Share =
1 - 1/6 = 5/6
★ New Profit Sharing Ratio :
• A's New Share =
⇒ 5/6 × 3/5 = 15/30
• B's New Share =
⇒ 5/6 × 2/5 = 10/30
• C's Share =
⇒ 1/6 = (1 × 5)/ (6 × 5) = 5/30
New Profit Sharing Ratio =
- A : B : C
- 15/30 : 10/30 : 5/30
⇒ 15 : 10 : 5 = 3 : 2 : 1
Therefore, New profit sharing ratio between A,B and C = 3 : 2 : 1.
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