Question

On 1-4-2010 Sahil and Charu entered into a partnership for sharing profits in the ratio of 4: 3. They admitted Tanu as a new partner on 1-4-2012 for `1/5` th share which she acquired equally from Sahil and Charu. Sahil, Charu and Tanu earned profits at a higher rate than the normal rate of return for the year ended 31-3-2013. Therefore, they decided to expand their business. To meet the requirements of additional capital they admitted Puneet as a new partner on 1-4-2013 for `1/7` th share in profits which he acquired from Sahil and Charu in 7: 3 ratio.

Calculate:

1) New profit sharing ratio of Sahil, Charu and Tanu for the year 2012-13.

2) New profit sharing ratio of Sahil, Charu, Tanu and Puneet on Puneet's admission.

Answer 1

Calculation of New Profit sharing Ratio of Sahil, Charu and Tanu for the year 2012 – 13

Old Ratio of Sahil and Charu = 4:3
Tanu was admitted for 1/5th share, which was acquired by her equally from Sahil and Charu

SacrificingShare

Sahil = `1/5 xx 1/2 = 1/10`

Charu = `1/5 xx 1/2 = 1/10`

New Profit Share = Old Ratio – Sacrificing Share

Sahil = `4/7 - 1/10 = (40 - 7)/70 = 33/70`

Charu = `3/7 - 1/10 = (30 - 7)/70 = 23/70`

Tanu = `1/10 + 1/10 = 2/10 or 14/70`

Therefore, New Profit Sharing Ratio of Sahil, Charu and Tanu = 33:23:14

2) Calculation of New Profit Sharing Ratio of Sahil, Charu, Tanu and Puneet

Old Ratio of Sahil, Charu and Tanu = 33:23:14

Puneet was admitted for 1/7th share, which he acquired from Sahil and Charu in the ratio of 7:3

SacrificingShare

Sahil = `1/7 xx 7/10 = 7/10`

Charu = `1/7 xx 3/10 = 3/70`

New Profit Share = Old Share - Sacrificing Share

Sahil = `33/70 - 7/70 = 26/70`

Charu = `23/70 - 3/70 = 20/70`

Tanu = `14/70`

Puneet  = `7/70 + 3/70 = 10/70`

Therefore, New Profit Sharing Ratio of Sahil, Charu Tanu and Puneet = 26:20:14:10