Question

to Xandy are
Partners sharing Profits are
5.3 hatres admitted Z for 1/10 Share Which he acquired for X and y
Calculate the new profit sharing ratio

Answer 1

Correct question:

X and Y are partners in a firm sharing profits and losses in the ratio 5:3. Z is admitted into the firm for 1/10th of the shares, which he acquires from X and Y equally. Calculate the new profit-sharing ratio.

Answer:

• X's old share = 5/8
• Y's old share = 3/8
• Z's share = 1/10 [As a result of sacrifice from X and Y]

Z gets 1/10 from X and Y equally, indicating that he gets half of 1/10 from X and half of 1/10 from Y, eventually adding up to 1/10.

From X, Z gets:

• 1/10 ÷ 2 = 1/10 × 1/2 = 1/20

From Y, Z gets:

• 1/10 ÷ 2 = 1/10 × 1/2 = 1/20

Calculation of the new profit-sharing ratio:

New ratio = Old ratio - Ratio surrendered

For X:

• New ratio = 5/8 - 1/20 = (100 - 8)/160 = 92/160

For Y:

• New ratio = 3/8 - 1/20 = (60 - 8)/160 = 52/160

For Z:

• New ratio = 1/10, or 16/160

Therefore, the new profit-sharing ratio is 92:52:16 or 23:13:4.