Calculation of New Profit Sharing Ratio.

A and B are partners in a firm sharing profit and loss in the ratio of 3:2. They admit C as a new partner for 1/10 share of profit which is given by A and B equally, Afterwards they admit D as a new partner for 1/6 share and A decides to retain his original share.
Calculate new ratio between A, B and C and then between A, B, C and D.

asked Sep 28, 2016 in Partnership-Admission by Shekhar (54 points) 257 views

1 Answer

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C’s share 1/10 is acquired equally from A and B hence each sacrifices (1/10)/2 = 1/20

A’s new share (3/5-1/20) = 11/20

B’s new share (2/5-1/20) =   7/20

Ratio of A::B: C 11:7:2

As A retains his old share, it means he will have 3/5 share in profits. This means after giving 1/6 to C, out of remaining 5/6 we have to give 3/5 to A and balance remaining will be B’s share.

Balance let after giving C (1 - 1/6 ) = 5/6

Balance after giving 3/5 to A (5/6 – 3/5) = 7/30 (this is B’s new share)

New ratio of A: B:C = 3/5 : 7/30 : 1/6 = 18:7:5

 

answered Sep 28, 2016 by jbsclasses (3,813 points)
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