Question

A and B are in partnership sharing profits and losses as 3 : 2. C is admitted for 1/4th share. Afterwards D enters for 20 paise in the rupee. Compute profit-sharing ratio of A, B, C and D after D's admission.

Answer 1

C’s admitted for share of profit

Let the combined share of profit of all partners be = 1

Combined share of A and B after C’s admission = 1 − C’s share

New Ratio = Old Ratio × Combined share of A and B

Profit sharing ratio after C’s admission will become old ratio to determine the ratio after D’s admission

D is admitted for share of profit

Let combined share of all partners after D’s admission = 1

Combined share of A, B and C after D’s admission = 1 − D’s share

New Ratio = Old Ratio × Combined share of A, B, and C