Question 31 of 64intermediate🔧 ApplyNumerical4 marks

A,B,C were partners in a firm sharing profits in 3:2:1 ratio. They admitted D for 10% profits. Calculate the new profit sharing ratio?

Correct Answer

New Profit Sharing Ratio = 9:6:3:2

Exercise: Questions for Practice | Q: 2 | (Page 52)
For More Understanding

Explanation

When a new partner is admitted and acquires a share from the existing partners without specifying the source of acquisition, it is assumed that the existing partners sacrifice proportionately from their shares. The remaining share after D's admission is distributed among A, B, and C in their old ratio of 3:2:1.

Solution Steps

  1. Step 1: Calculate D's share D is admitted for 10% profits = 10/100 = 1/10

  2. Step 2: Calculate remaining share for existing partners Remaining share = 1 - 1/10 = 9/10

  3. Step 3: Distribute remaining share in old ratio The remaining 9/10 is distributed among A, B, C in their old ratio 3:2:1. A's new share = (9/10) × (3/6) = 27/60 = 9/20 B's new share = (9/10) × (2/6) = 18/60 = 6/20 C's new share = (9/10) × (1/6) = 9/60 = 3/20 D's share = 1/10 = 2/20

  4. Step 4: Calculate new profit sharing ratio A : B : C : D = 9/20 : 6/20 : 3/20 : 2/20 = 9:6:3:2

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