Question

X,Y and Z are partners sharing profits and losses in the ratio of 4: 3: 2. Y retires and surrenders 1/9th of his share in favour of X and the remaining in favour of Z. The new profit sharing ratio will be__________.

a)1: 8

b)13:14

c)8: 1​

Answer 1

Explanation:(b)

Share of Y= 3/9

Since Y gives 1/9th of his share to X then portion of share given to X will be

3/9x1/9=1/27

Now share given to Z= 3/9-1/27= 8/27

Hence,

New share of X= 4/9 + 1/27= 13/27

of Z= 2/9 + 8/27= 14/27

New Ratio= 13:14

Answer 2

(b) 13:14

Given in the question that the profit-sharing ratio of X, Y, and Z is 4:3:2. Y retires and gives 1/9th of his share to X and the remaining share to Z. To calculate the new profit sharing ratio:

The total share of Y in the firm = 3/9

1/9th part of his share to be given to X. 1/9th of Y's share = 3/9 * 1/9 = 1/27

Remaining share to be given to Z. Part of Y's share to be given to Z = Y's share - share given to X

= 3/9 - 1/27 = 8/27

Now, new share of X = his old share + share given by Y

                                   = 4/9 + 1/27 = 13/27

New share of Z = his old share + share given by Y

                         = 2/9 + 8/27 = 14/27

Therefore, new profit sharing ratio of X and Z = 13/27 : 14/27 = 13:14.