Question

A and B are partners sharing profits and losses in the ratio of 3 : 2. They admit X and Y as new partners. A surrendered `1/3`rd of his share in favour of X and B surrendered `1/4`th of his share in favour of Y. Calculate the new profit sharing ratio of A, B, X and Y.

Answer 1

Calculation of Surrendered Share:

A’s old share = `3/5` A surrenders `1/3`rd of `3/5` in favour of X = `1/3 xx 3/5`

= `3/15`

= `1/5`

B’s old share = `3/5` B surrenders `1/4`rd of `2/5` in favour of Y = `1/4 xx 2/5`

= `2/20`

= `1/10`

Calculation of New Ratios:

A = `3/5 - 1/5`

= `2/5`

= `(2 xx 2)/(5 xx 2)`

= `4/10`

B = `2/5 - 1/10`

= `(2 xx 2)/(5 xx 2) - 1/10`

= `4/10 - 1/10`

= `3/10`

X = `1/5`

= `(1 xx 2)/(5 xx 2)`

= `2/10`

Y = `1/10`

New Ratio of A, B, X and Y = `4/10 : 3/10 : 2/10 : 1/10` or 4 : 3 : 2 : 1