-VK and MK were partners in a firm sharing profits in 5:3 ratio. They admit KK and PP as new parnters. VK surrenders 1/2 of her share in favour of KK and MK surrenders 1/3rd of his share in favour of PP. Calculate new PSR of partners
Answers
Answer :
New PSR of the partners is 20 : 15 : 30 : 22.5
Explanation :
Let's say the total profit of the firm is 'x'.
The initial profit-sharing ratio (PSR) of VK and MK was 5:3, so VK's share was 5/8th and MK's share was 3/8th of the total profit 'x'.
When VK surrendered 1/2 of her share in favor of KK, her share became 5/8 - 1/2 * 5/8 = 5/16 of the total profit 'x'.
Similarly, when MK surrendered 1/3rd of his share in favor of PP, his share became 3/8 - 1/3 * 3/8 = 1/4 of the total profit 'x'.
The new PSR after admitting KK and PP as partners is (5/16 + 0) : (1/4 + 0) : (0 + 1/2 * 5/8) : (0 + 1/3 * 3/8) = 5/16 : 1/4 : 5/8 : 3/8 = 20 : 15 : 30 : 22.5
So, the new PSR of the partners is 20 : 15 : 30 : 22.5
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Explanation:
To calculate the new profit sharing ratio (PSR) of partners, we need to determine the new distribution of profits among the partners. Here's how:
Start with the original PSR of 5:3 for VK and MK, which means that for every 8 units of profit, VK gets 5 units and MK gets 3 units.
VK surrenders 1/2 of her share, which is 5/2 = 2.5 units, in favor of KK.
MK surrenders 1/3 of his share, which is 3/3 = 1 unit, in favor of PP.
The new distribution of profits is:
VK: 5 - 2.5 = 2.5 units
MK: 3 - 1 = 2 units
KK: 2.5 units
PP: 1 unit
The new PSR is:
2.5 + 2 + 2.5 + 1 = 8 units
2.5 units / 8 units = 5/8
2 units / 8 units = 1/4
So, the new PSR is 5/8 for VK and KK and 1/4 for MK and PP.