Question

A and B were partners in a firm sharing profits and losses in the ratio 3 : 2. They admit C into the partnership with $\frac{1}{6}$ share in the profits. Calculate the new profit sharing ratio.

Answer 1

Let total share = 1, C's share = $\frac{1}{6}$

Ramaining share of A and B = $1-\frac{1}{6}=\frac{6-1}{6}=\frac{5}{6}$

Profit / Loss sharing ratio of A and B = 3 : 2

New share of A = $\frac{5}{6}\times \frac{3}{5}=\frac{15}{30}$

New share of B = $\frac{5}{6}\times \frac{2}{5}=\frac{10}{30}$

New profit sharing ratio of A, B and C

$\frac{15}{30}:\frac{10}{30}:\frac{1}{6}$

or $\frac{15}{30}:\frac{10}{30}:\frac{5}{30}$

or 15 : 10 : 5

or 3 :2 : 1