# Calculate New Profit Sharing Ratio? - Accountancy

Sum

Singh, Gupta and Khan are partners in a firm sharing profits in 3:2:3 ratio. They admitted Jain as a new partner. Singh surrendered 1/3 of his share in favour of Jain: Gupta surrendered 1/4 of his share in favour of Jain and Khan surrendered 1/5 in favour of Jain. Calculate new profit sharing ratio?

#### Solution

Old Ratio = Singh : Gupta : Khan

= 3 : 2 : 3

= 3/8 : 2/8 : 3/8

Singh Surrender  = 1/3 of his share

Gupta Surrender = 1/4 of his share

Khan Surrender = 1/5 of his share

Sacrificing Ratio = Old Ratio × Surrender Ratio

Singh’s = 3/8 xx 1/3 = 3/24

Gupta’s = 2/8 xx 1/4 = 2/32

Khan’s = 3/8 xx 1/5 = 3/40

New Ratio = Old Ratio − Sacrificing Ratio

Singh’s = 3/8 - 3/24 = [ 9 -3 ]/24 = 6/24

Gupta’s = 2/8 - 2/32 = [ 8 -2]/32 = 6/32

Khan’s = 3/8 - 3/40 = [ 15 - 3]/40 = 12/40

New Ratio = Singh : Gupta : Khan : Jain

= 6/24 : 6/32 : 12/40 : 21/80

=  [120 : 90 : 144 : 126]/480

=  20 : 15 : 24 : 21

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

NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
Chapter 3 Reconstitution of a Partnership Firm – Admission of a Partner
Exercise | Q 10 | Page 165