Question

A,BandCarepartnerssharingprofitsintheratioof1/2:1/3:1/6.TheyadmitDfor1/8thshareofprofit. Calculate new profit-sharing ratio.

Answer 1

Question: A, B and C are partners sharing profits in the ratio of 1/2 :1/3 : 1/6. They admit D for 1/8th share of profit. Calculate new profit-sharing ratio.

Answer: New profit sharing ratio is 3 : 2 : 1 : 6

Step by step Explanation:

Given:

Old ratio of A B and C = 1/2 : 1/3 : 1/6 or 3/6 : 2/6 : 1/6 or 3 : 2 : 1

D is admitted for 1/8th share of profit.

Formula = 1 - share of New Partner

= 1- 1/8

= 7/8 Remaining Profit

New Ratio = Old Ratio × balance of 1

So,

A's New Ratio = 7/8 × 3/6 = 21/48

B's New Ratio = 7/8 × 2/6 = 14/48

C’s New Ratio = 7/8 × 1/6 =7/48

D's New Ratio = 1/8 or 6/48 {..given}

Thus, New ratio = 21/48 : 14/48 : 7/48 : 6/48 or 21 : 14 : 7 : 6 or 3 : 2 : 1 : 6

New Profit Sharing Ratio will 3 : 2 : 2 : 6