Question 37 of 64intermediate🔧 ApplyNumerical4 marks

A, B and C were partners in a firm sharing profits in 3:3:2 ratio. They admitted D as a new partner for 4/7 profit. D acquired his share 2/7 from A. 1/7 from B and 1/7 from C. Calculate new profit sharing ratio?

Correct Answer

New Profit Sharing Ratio = 5:13:6:32

Exercise: Questions for Practice | Q: 8 | (Page 53)
For More Understanding

Explanation

This is a calculation of new profit sharing ratio when a new partner is admitted. The key concept is that when a new partner acquires specific shares from existing partners, each old partner's new share = old share - share surrendered to new partner. The context shows similar solved examples where shares are subtracted fractionally.

Solution Steps

  1. Step 1: Calculate Old Profit Sharing Ratio A : B : C = 3 : 3 : 2 A's share = 3/8, B's share = 3/8, C's share = 2/8

  2. Step 2: Identify Shares Acquired by D D's total share = 4/7 D acquired 2/7 from A, 1/7 from B, and 1/7 from C

  3. Step 3: Calculate New Shares of Each Partner A's new share = 3/8 - 2/7 = 21/56 - 16/56 = 5/56 B's new share = 3/8 - 1/7 = 21/56 - 8/56 = 13/56 C's new share = 2/8 - 1/7 = 14/56 - 8/56 = 6/56 D's share = 4/7 = 32/56

  4. Step 4: Determine New Profit Sharing Ratio A : B : C : D = 5/56 : 13/56 : 6/56 : 32/56 = 5:13:6:32

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