Question

X, Y and Z have been sharing profits in the ratio of 4:2:1 Z retires. X and Y take Z's share equally. New profit sharing

ratio will be:

(A) 5:2

(B) 5:3

(C) 9:5

(D) 4:2​

Answer 1

Explanation:

X, Y and Z have been sharing profits in the ratio of 4:2:1

X:Y:Z= 4:2:1

X = 4/7

Y= 2/7

Z= 1/7

Z retires,

After Z retires, X and Y take Z's share equally.

each of 2 gets 1/2 from Z's share

Z= 1/7

= 1/7 × 1/2 = 1/14

So,

New profit sharing ratio =

X's new share =

= 4/7 + 1/14

= 8 + 1/14

= 9/14

Y's new share =

= 2/7 + 1/14

= 4 + 1/14

= 5/14

New profit sharing ratio =

X:Y = 9/14 : 5/14

= 9 : 5

Hence, option (C) 9:5

New profit sharing ratio of X and Y will be 9:5

Answer 2

Option (C) 9:5

Explanation:

★ Old Ratio :

X : Y : Z = 4 : 2 : 1

• X's Share = 4/7
• Y's Share = 2/7
• Z's Share = 1/7

Z retires,

X and Y take Z's share equally.

• Z's Share = 1/7

• Z's Share taken by X =

⇒ 1/7 × 1/2 = 1/14

• Z's Share taken by Y =

⇒ 1/7 × 1/2 = 1/14

★ New Profit Sharing Ratio :

New Profit Sharing Ratio = Old Ratio + Share taken from Z

• X's new share =

⇒ 4/7 + 1/14 = (8 + 1)/14

⇒ 9/14

• Y's new share =

⇒ 2/7 + 1/14 = (4 + 1)/14

⇒ 5/14

New Profit Sharing Ratio =

• X : Y
• 9/14 : 5/14

⇒ 9 : 5

Therefore, Option (C) 9:5

New profit sharing ratio will be 9 : 5