Question

A, B and C are partners sharing profits in 2 : 2 : 1 ratio. They admitted D for $\frac{1}{8}$ share which he acquired entirely from A. Calculate new profit sharing ratio.

Answer 1

Sacrifice is made by only A and thus his share will be calculated. B and C's share remain the same.

D's share = $\frac{1}{8}$

A's sacrifice = $\frac{1}{8}$

A's new share = $\frac{2}{5}-\frac{1}{8}=\frac{16-5}{40}=\frac{11}{40}$

B and C's share remain same.

Therefore, new profit sharing ratio of A : B : C : D

$\frac{11}{40}:\frac{2}{5}:\frac{1}{5}:\frac{1}{8}$

or $\frac{11}{40}:\frac{16}{40}:\frac{8}{40}:\frac{5}{40}$

or 11 : 16 : 8 : 5