Sum
Find New Profit-sharing Ratio:
A and B are partners sharing profits/losses in the ratio of 3 : 2 . C is admitted for 1/4th share. A and B decide to share equally in future.
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Solution
Old Ratio = A : B = 3 : 2.
C admits for `1/4` share of profit
Let the combined share of all partners after C’s admission be = 1
Combined share of A and B after C’s admission = 1 - C's share
= 1 - `1/4 = 3/4`
New Ratio of A and B each = Combined share of A and B x `1/2`
= `3/4 xx 1/2 = 3/8` each
New Profit Sharing Ratio = `3/8 : 3/8 : 1/4`
= `[ 3 : 3 : 2]/8`
= 3 : 3 : 2
Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio
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