A and B were partners in a firm sharing profits in 3:2 ratio. They admitted C for 3/7 share which he took 2/7 from A and 1/7 from B. Calculate new profit sharing ratio?
New Profit Sharing Ratio = 11:9:15
Explanation
The question involves calculating the new profit sharing ratio when a new partner is admitted and acquires shares from existing partners. The key is to subtract the share surrendered by each old partner from their original share. A's new share is calculated by deducting 2/7 from his original 3/5 share, and B's new share is calculated by deducting 1/7 from his original 2/5 share. The new partner C gets 3/7 share directly.
Solution Steps
Step 1: Calculate Old Shares A's old share = 3/(3+2) = 3/5 B's old share = 2/(3+2) = 2/5
Step 2: Calculate New Shares of Old Partners A's new share = Old share - Share given to C = 3/5 - 2/7 = 21/35 - 10/35 = 11/35
B's new share = Old share - Share given to C = 2/5 - 1/7 = 14/35 - 5/35 = 9/35
Step 3: Calculate C's Share C's share = 3/7 = 15/35
Step 4: Determine New Profit Sharing Ratio A : B : C = 11/35 : 9/35 : 15/35 = 11:9:15