X and y are partners sharing profits and losses in the ratio of 3:2. They admit z into partnership of 1/6th share of future profit. Calculate tha new profit sharing ratio.
Answers
Answer: New ratio of partners is 3 : 2 : 1.
Step by step explanation:
Given that, Old ratio of partners X and Y is 3 : 2.
Z is admitted for 1/6th share of profit.
We know that,
Balance of 1 = 1 - share of new partner
= 1 - 1/6
= 5/6 [...remaining share]
Now,
New ratio = Old ratio × balance of 1
X's new ratio = 3/5 × 5/6
= 15/30
Y's new ratio = 2/5 × 5/6
= 10/30
Z's new ratio = 1/6 or 5/30 ...[given]
Thus, New ratio of partners = 15/30 : 10/30 : 5/30 or 3 : 2 : 1.
New profit sharing ratio: The ratio in which the old/continuing partners decide to share the future profits & losses is called new profit sharing ratio.
Explanation:
old ratio =
X : Y = 3 : 2
- X's Share = 3/5
- Y's Share = 2/5
They admit Z into partnership of 1/6th share of future profit.
Z 's Share = 1/6
Let,
total profit share = 1
1-1/6 = 5/6
Remaining Share = 5/6
New Ratio :
X's new share = 5/6 × 3/5 = 15/30
Y's new share = 5/6 × 2/5 = 10/30
Z's share = 1/6 = 5/30
X : Y : Z = 15/30 : 10/30 : 5/30
= 15 : 10 : 5 = 3 : 2 : 1
Hence, the new profit sharing ratio of X, Y and Z = 3 : 2 : 1.