A. B and C are partners sharing profits in 3:2:2 ratio. They admitted D as a new partner for 1/5 share which he acquired from A. B and C in 2:2:1 ratio respectively. Calculate new profit sharing ratio?
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Explanation:
Solution :
★ Old Ratio :
A : B : C = 3 : 2 : 2
- A's Share = 3/7
- B's Share = 2/7
- C's Share = 2/7
They admitted D as a new partner for 1/5 share.
- D's Share = 1/5
Which he acquired from A,B and C in 2 : 2 : 1 ratio respectively.
D acquired Share from A =
⇒ 1/5 × 2/5 = 2/25
D acquired Share from B =
⇒ 1/5 × 2/5 = 2/25
D acquired Share from C =
⇒ 1/5 × 1/5 = 1/25
★ New Profit Sharing Ratio :
• A's New Share =
⇒ 3/7 - 2/25
⇒ (75 - 14)/175
⇒ 61/175
• B's New Share =
⇒ 2/7 - 2/25
⇒ (50 - 14)/175
⇒ 36/175
• C's New Share =
⇒ 2/7 - 1/25
⇒ (50 - 7)/175
⇒ 43/175
• D's Share =
⇒ 1/5 × 35/35
⇒ 35/175
New Profit Sharing Ratio =
- A : B : C : D
- 61/175 : 36/175 : 43/175 : 35/175
⇒ 61 : 36 : 43 : 35
Therefore, New profit sharing ratio of A : B : C : D = 61 : 36 : 43 : 35
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