Question

A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. They admit D for `1/4`th share in the profits and he brought in ₹ 1,50,000 as his share of goodwill which was credited to the Capital Accounts of B and C respectively with ₹ 1,25,000 and ₹ 25,000.

Calculate the new profit sharing ratio.

Answer 1

Sacrificing Ratio of B and C = 1,25,000 : 25,000

= 5 : 1

D’s Share = `1/4`

B’s Sacrifice = `1/4 xx 5/6`

= `5/24`

C’s Sacrifice = `1/4 xx 1/6`

= `1/24`

New Ratio = Old Ratio − Sacrificing Ratio

B = `2/6 - 5/24`

= `(2 xx 4)/(6 xx 4) - 5/24`

= `8/24 - 5/24`

= `(8 - 5)/24`

= `3/24`

= `1/8`

C = `1/6 - 1/24`

= `(1 xx 4)/(6 xx 4) - 1/24`

= `4/24 - 1/24`

= `(4 - 1)/24`

= `3/24`

= `1/8`

A = `3/6`

= `(3 xx 4)/(6 xx 4)`

= `12/24`

= `4/8`

D = `1/4`

= `(1 xx 2)/(4 xx 2)`

= `2/8`

New Ratio of A, B, C, and D = `4/8 : 1/8 : 1/8 : 2/8` or 4 : 1 : 1 : 2