Question

Amla and Kamla are partners in a firm sharing profits in the ratio of 4 : 1 respectively. They admitted Bimla as a new partner for `1/4`th share in the profits, which she acquired wholly from Amla. Determine the new profit sharing ratio of the partners.

Answer 1

1. Identify the Old Shares

Old Profit Sharing Ratio (Amla : Kamla): 4 : 1

Amla's Old Share = `4/5`

Kamla's Old Share = `1/5`

2. Calculate New Shares after Bimla's Admission

Bimla is admitted for a `1/4`th share, which she acquires wholly from Amla. This means only Amla's share changes, while Kamla's share remains untouched.

Amla's New Share:

`4/5 - 1/4 = (16 - 5)/20 = 11/20`

Kamla's Share (Unchanged):

`1/5 = (1 xx 4)/(5 xx 4) = 4/20`

Bimla's New Share:

`1/4 = (1 xx 5)/(4 xx 5) = 5/20`

By converting all fractions to a common denominator of 20, the New Profit Sharing Ratio (Amla : Kamla : Bimla) is:

11 : 4 : 5