Question

P and Q are partners sharing profits and losses in the ratio of 4 : 3. They admit R as a partner for a `1/7`th share in profits, which he acquires equally from P and Q. Calculate the new profit-sharing ratio of the partners.

Answer 1

Share of Profits given to R = `1/7`

Share acquired by R from P = `1/2 xx 1/7`

= `1/14`

Share acquired by R from Q = `1/2 xx 1/7`

= `1/14`

P’s new share after surrendering `1/14` in R’s favour = `4/7 - 1/14`

= `4/7 xx 2/2`

= `8/14`

= `8/14 - 1/14`

= `7/14`

Q’s new share after surrendering `1/14` in R’s favour = `3/7 - 1/14`

= `3/7 xx 2/2`

= `6/14`

= `6/14 - 1/14`

= `5/14`

R’s Share = `1/7 xx 2/2`

= `2/14`

Hence, the new profit-sharing ratio of P, Q and R = `7/14 : 5/14 : 2/14` or 7 : 5 : 2.