Question

A, B and C are three partners sharing profits and losses in the ratio of $4:3:2$. D is admitted for $1/10$ share. The new ratio will be __________.

• A. $5:4:3:2$
• B. $6:5:3:2$
• C. $4:3:2:1$
• D. None of these

Answer 1

Answer: (C)

$4:3:2:1$

Old ratio (A, B, and C) = 4 : 3 : 2

D is admitted for 1/10 share

Let the combined share of profit for all partners after D's admission = 1

Combined share of A, B and C after D's admission = 1 - D's share

= 1 - (1/10)

= 9/10

New ratio = Old ratio * Combined share of A, B and C

A's new share = (4/9) * (9/10)

= 4/10

B's new share = (3/9) * (9/10)

= 3/10

C's new share = (2/9) * (9/10)

= 2/10

D's share = 1/10

Therefore, new share of A, B, C and D = (4/10), (3/10), (2/10) and (1/10)

= 4 : 3 : 2 : 1