X and Y are partners in a firm sharing profits and losses in proportion of 2:1. They admit a new partner Z for 1/6 share in profit. What is the new profit sharing ratio of X, Y and Z?
Answers
Explanation:
given,
old ratio= 2:1
z's share = 1/6
let the whole share be 1
remaining share be 1-1/6= 5/6
x new share - 5/6×2/3=10/18
y new share -5/6×1/3=5/18
z new share - 1/6×1/3= 1/18
new profit and loss sharing ratio is 10:5:1 .
Appropriate Question:
X and Y were partners in a firm sharing profit and losses in the ratio of 2:1. Z is admitted in the firm as a partner with 1/6th share which he acquires equally from X and Y. Calculate new profit sharing ratio of X, Y and Z
Solution:
We have old profit sharing ratio of X and Y.
- X's share = 2/3
- Y's share = 1/3
Let's assume the total profit be 1.
Z is admitted as a new partner with 1/6th share which he acquires equally from X and Y i.e. sacrifice ratio of both X and Y is 1/2.
- Z acquires share from X = 1/2 x 1/6 = 1/12
- Z acquires from Y = 1/2 x 1/6 = 1/12
New profit sharing ratio
- X's new share = 2/3 - 1/12 = 7/12
- Y's new share = 1/3 - 1/12 = 3/12
Required profit sharing ratio is:
⇒ X : Y : Z
⇒ 1/6 : 7/12 : 3/12
⇒ 2/12 : 7/12 : 3/12
⇒ 2 : 7 : 3
So the required ratio is 2:7:3.