Question

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

Answer 1

C's share in profit = `2/10`

C's share acquired by A = `1/2 xx 2/10 = 2/20`

A's new share = `3/10 + 2/20 = (6 + 2)/20 = 8/20`

C's share acquired by D `= 1/2 xx 2/10 = 2/20`

D's new share = `1/10 + 2/20 = (2 + 2)/20 = 4/20`

New profit sharing ratio of A, B and D are

A = `8/20`, B = `4/10 = (4 xx 2)/(10 xx 2) = 8/20`, C = `4/20`

New profit sharing ratio - 8 : 8 : 4 i.e., 2 : 2 : 1.