Question

A and B were partners in a firm sharing profits in 3 : 2 ratio. They admitted C for $\frac{3}{7}$ share which he took $\frac{2}{7}$ from A and $\frac{1}{7}$ from B. Calculate new profit sharing ratio.

Answer 1

Old profit sharing ratio of A and B = 3 : 2

C's share = $\frac{3}{7}$

Acquired from A = $\frac{2}{7}$

Acquired from B = $\frac{1}{7}$

A's new share = $\frac{3}{5}-\frac{2}{7}=\frac{21-10}{35}=\frac{11}{35}$

B's new share = $\frac{2}{5}-\frac{1}{7}=\frac{14-5}{35}=\frac{9}{35}$

Hence, New profit sharing ratio of A : B : C

$\frac{11}{35}:\frac{9}{35}:\frac{3}{7}$

or $\frac{11}{35}:\frac{9}{35}:\frac{15}{35}$

or 11 : 9 : 15