Question

X and Y are equal partners admit Z into partnership for 1/7th future profit. there new profit sharing ratio will be..............
​

Answer 1

The new profit-sharing ratio between X, Y, and Z will be 1:1:1.

Given in the question that old profit sharing ratio of the partners X and Y is equal which means it is 1:1.

Z was admitted for 1/7th share in the profits. Now, we have to calculate the new profit sharing ratio after Z's admission. So let total share of profits of the firm = 1

Remaining share after deducting Z's share = firm's total share - Z's share

= 1 - 1/7 = 6/7

now, X's new share = old share * remaining share.

                                 = 1/2 * 6/7 = 6/14 = 1/7

Y's new share = old share * remaining share.

                                 = 1/2 * 6/7 = 6/14 = 1/7

so, new profit sharing ratio of X, Y, Z = 1/7 : 1/7 : 1/7 = 1:1:1