Question:-X,Y,Z are partner sharing profit and losses in the ration of 5:3:2. they admit A into partnership and give him 1/5th share of profits. Find new profit sharing ratio ?
To find:- The new profit sharing ratio
Answer:-
Old ratio:-
x : y: z = 5 : 3: 2
X's share = 5/10
Y's share = 3/10
Z's share = 2/10
They admit A into partner ship for 1/5th share
A's share = 1/5
let the total profit be = 1
remaining share = 1 - 1/5 = 4/5
→ New profit sharing ratio:
⇒ 5/10 × 4/5 = 20/50
⇒ 3/10 × 4/5 = 12/50
⇒ 2/10 × 4/5 = 8/50
⇒ 1/5 × 10/10 = 10/50
New profit sharing ratio
⇒ X : Y : Z : A = 20 : 12 : 8 : 10
Cancelling by 2
⇒ 10 : 6 : 4 : 5
There fore New profit sharing ratio =
X : Y : Z : A = 10 : 6 : 4 : 5
