Question

A, B, C and D were partners in a firm sharing profits and losses in the ratio of 1 : 2 : 3 : 4. On 31.3.2022, C retired from the firm and his share was acquired by A and B in the ratio of 3 : 2. Calculate the new profit sharing ratio of A, B and D.

Answer 1

C's share in profit = `3/10`

C's share acquired by A = `3/5 xx 3/10 = 9/50`

As new share = `1/10 + 9/50 = (5 + 9)/50 = 14/50`

C's share acquired by B = `2/5 xx 3/10 = 6/50`

B's new share = `2/10 + 6/50 = (10 + 6)/50 = 16/50`

New profit sharing ratio of A, B and D

A ⇒ `14/50`;  B ⇒ `16/50`; D ⇒ `4/10 = (4 xx 5)/(10 xx 5) = 20/50`