Question

A, B, C and D were partners in a firm sharing profits in 5 : 3 : 2 : 2 ratio. B and C retired from the firm. B’s share was acquired by D and C’s share was acquired by A. Calculate new profit-sharing ratio of A and D.

Answer 1

Answer:

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Explanation:

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Answer 2

The new profit-sharing ratio of A and D are given below:

Explanation:

Given,

A, B, C and D were partners sharing profits in the ratio 5 : 3 : 2 : 2.

The Old Ratio of A, B, C and D =5: 3: 2: 2

After B and C's retirement, B’s share was acquired by D and in the same way C’s share was acquired by A.

B's and C's retires from the firm

B's Share $=\frac{3}{12}$

C's Share $=\frac{2}{12}$

B' Share was get by D's and C's Share was get by A's.

Calculation of New Share:

D's New Share=D's Old Share + Share of B's

$=\frac{2}{12}+\frac{3}{12}=\frac{5}{12}$

A's New Share=A's Old Share + Share of C's

$=\frac{5}{12}+\frac{2}{12}=\frac{7}{12}$

New Profit Ratio (A and D)=7: 5

Thus, the New profit-sharing ratio of A and D will be 7 : 5