Sum

A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admitted D as a new partner for 1/8th share in the profits, which he acquired 1/16th from B and 1/16th from C. Calculate the new profit-sharing ratio of A, B, C and D.

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#### Solution

Profit Sharing Ratio of A, B and C = 3 : 2 : 1

D's share = `1/8` ( acquired `1/16`th share each from B and C )

A's share = `3/6` ( retained original share )

B's new share = `2/6 - 1/16 = 13/48`

C's new share = `1/6 - 1/16 = 5/48`

New Ratio of A, B, C and D = `3/6 : 13/48 : 5/48 : 1/8` or `24 : 13 : 5 : 6`

Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio

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