Question

A,B,C and D are in partnership sharing profits and losses in the ratio of 9:6:5:5 respectively.E joins the firm for 20% share.A,B,C snd D would share profits in future among themselves are 3/10:4/10:2/10:1/10. calculate the new profit sharing ratio after E's admission​

Answer 1

Answer:

let the total share be 1

remaining share = 1-1/5 (20/100 or 1/5) = 4/5

new ratio

A's share = 3/10×4/5 = 12/50

B's share = 4/10×4/5 = 16/50

C's share = 2/10×4/5 = 8/50

D's share = 1/10× 4/5 = 4/50

E's share = 20/100 or 1/5

new ratio = 12:16:8:4:10 or 6:8:4:2:5

Answer 2

Given:

E's share on admission=20%

The future profit-sharing ratio of A, B, C, D= 3:4:2:1

To find:

The new profit sharing ratio after E's admission

Solution:

We can find the new ratio by following the given process-

We know that the old partners will be sharing their profits in 3:4:2:1.

E's new share= 20%= 1/5

The remaining share is the total share of A, B, C, D.

The remaining share=1-1/5

=4/5

A's new share= 3/10 of 4/5

=3/10×4/5= 12/50

B's new share= 4/10 of 4/5

=4/10×4/5= 16/50

C's new share= 2/10 of 4/5

=2/10×4/5= 8/50

D's new share= 1/10 of 4/5

=1/10×4/5=4/50

E's new share=1/5=10/50

So, the new profit-sharing ratio of A, B, C, D, E= 12/50:16/50:8/50:4/50:10:50

=12:16:8:4:10

=6:8:4:2:5

Therefore, the new profit sharing ratio after E's admission is 6:8:4:2:5.