A, B and C are partners sharing profits in the ratio f 2:2:1. D is admitted as a new partner for 1/6th share. C will retain his share. Calculate new profit sharing ratio.
Answers
Explanation:
A's old share= 2/5
B's old share= 2/5
C's old share= 1/5
D is admitted for 1/6th share. C will retain his original share.
Hence, remaining share= 1- [1/6] - [1/5]
= 19/30
This remaining share will be shared by A and B in their old ratio, i.e, 2:2
A's new share= 2/4 * 19/30
= 38/120
B's new share= 2/4 * 19/30
= 38/120
New Profit sharing ratio= 38:38:24:20
= 19:19:12:10
Sacrificing ratio= old ratio- new ratio
A's sacrifice= 2/5- 19/60
= 5/60
B's sacrifice= 2/5- 19/60
= 5/60
Sacrificing ratio= 5:5= 1:1
[Note: since nothing is mentioned, we assume that only A and B have sacrificed since C retains his old share]
New Profit Sharing Ratio :
A : B : C : D = 19 : 19 : 12 : 10
Explanation:
★ Old Ratio :
A : B : C = 2 : 2 : 1
- A's Share = 2/5
- B's Share = 2/5
- C's Share = 1/5
D is admitted as a new partner for 1/6th share.
- D's Share = 1/6
But,
C will retain his share.
So,
Let,
Total share of profit of firm = 1
- D's Share = 1/6
- C's Share = 1/5
Total share of both partner =
1/6 + 1/5 = 11/30
Remaining share =
1 - 11/30 = 19/30
★ Old Ratio of A and B = 2 : 2
★ New Profit Sharing Ratio :
• A's New Share =
⇒ 2/4 × 19/30 = 38/120
• B's New Share =
⇒ 2/4 × 19/30 = 38/120
• C's New Share =
⇒ 1/5 = 1 × 24/5 × 24 = 24/120
• D's Share =
⇒ 1/6 = 1 × 20/6 × 20 = 20/120
New Profit Sharing Ratio :
- A : B : C : D = 38/120 : 38/120 : 24/120 : 20/120
⇒ 38 : 38 : 24 : 20 = 19 : 19 : 12 : 10
Therefore,
New Profit Sharing Ratio :
A : B : C : D = 19 : 19 : 12 : 10