Question

A and B are partners sharing profits in the ratio of 7 : 3. C was admitted. A surrendered `1/7`th of his share and B `1/3`rd of his share in favour of C. Calculate the sacrificing ratio and the new profit-sharing ratios of the partners.

Answer 1

Calculation of Sacrificing Ratios:

A = `1/7 xx 7/10`

= `7/70`

= `1/10`

B = `1/3 xx 3/10`

= `3/30`

= `1/10`

Sacrificing A Ratio = `1/10 : 1/10` or 1 : 1

Calculation of New Profit Sharing Ratios:

A’s new share = `7/10 - 1/10`

= 6/10

= `3/5`

B’s new share = `3/10 - 1/10`

= `2/10`

= `1/5`

C’s new share = `1/10 + 1/10`

= `2/10`

= `1/5`

Therefore, the new ratio of A, B and C = `3/5 : 1/5 : 1/5` or 3 : 1 : 1