Question

Old profit sharing ratio between 2 partners is 5:3 and the newly admited partner is given 1/5 share. find the new profit ratio

Answer 1

Answer:

Old ratio (A and B) = 5 : 3

C is admitted for 3/10th share of profit

A's sacrifice in favour of C = 1/5

B's sacrifice in favour of C = 1/10

New ratio = Old ratio - Sacrifcing ratio

A's new ratio = (5/8) - (1/5) = 17/40

B's new ratio = (3/8) - (1/10) = 11/40

C's share = 3/10 or 12/40

Therefore, new profit sharing ratio of A : B : C is 17 : 11 : 12

Answer 2

Explanation:

★ Old Ratio :

I st partner : II nd partner = 5 : 3

• I st partner's share = 5/8
• II nd partner's share = 3/8

The newly admited partner is given 1/5 share.

• New partner's share = 1/5

Let,

Total Profit = 1

New partner's share = 1/5

Remaining share = 1 - 1/5 = 4/5

★ New Profit Ratio :

• I st partner's New share =

⇒ 5/8 × 4/5 = 20/40

• II nd partner's New share =

⇒ 3/8 × 4/5 = 12/40

• New partner's share =

⇒ 1/5 = (1×8)/(5×8) = 8/40

New Profit Ratio =

I st partner : II nd partner : New partner = 20/40 : 12/40 : 8/40

⇒ 20 : 12 : 8 = 5 : 3 : 2

⇒ 5 : 3 : 2

Therefore, the new profit ratio = 5 : 3 : 2.