Question

A and B were partners in a firm sharing profits and losses in the ratio of 3:2. They admit C into the partnership with 1/6 share in the profits. Calculate the new profit sharing ratio?

Answer 1

	A	:	B
Old Ratio	3	:	2
	OR
	`3/5`	:	`2/5`

C admits for  `1/6` share of new profit in new firm.

Let new firm profit = 1

Remaining share of A and B in the new firm = 1 − C’s share

= 1 − `1/6`

= `5/6`

New Ratio = Old Ratio × Remaining Share of A and B
A = `3/5 xx 5/6` = `15/30`

B = `2/5 xx 5/6 = 10/30`

New Ratio = A  :  B  :  C

                 = `15/30   :    10/30   :    1/6`

                 = `[15 : 10 : 5]/30`

                 = 15:10:5               

                 = 3 : 2 :1