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Question
A and B were partners in a firm sharing profits in 3:2 ratio. They admitted C for 3/7 share which he took 2/7 from A and 1/7 from B. Calculate new profit sharing ratio?
Sum
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Solution
Old Ratio = A : B
= 3 : 2
= `3/5 : 2/5`
C admitted for `3/7` share in the new firm
A’s sacrifice = `2/7`
B’s sacrifice `1/7`
New Ratio = Old Ratio − Sacrificing Ratio
A = `3/7 - 2/7 = [ 21 -10 ]/35`
= `11/35`
B = `2/5 - 1/7 = [ 14 - 5]/35`
= `9/35`
New Ratio = A : B : C
= ` 11/35 : 9/35 : 3/7`
= `[ 11 : 9 : 15]/35`
= `11 : 9 : 15`
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