Question

A & B are equal partners. They admit C and D as partners with $1/5$th and $1/6$th share respectively. What is the profit sharing ratio of all the partners?

• A. $27:18:5:6$
• B. $28:17:5:6$
• C. $5:4:5:6$
• D. $19:19:12:10$

Answer 1

The correct option is D $19:19:12:10$

Old ratio (A and B) 1 : 1

C admits for 1/5th share

D admits for 1/6th share

Let the combined share of all the partners after C's and D's admission = 1

Combined share of A and B in the new firm = 1 - (1/5) - (1/6)

19/30

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

A's new ratio = (1/2) * (19/30) = 19/60

B's new ratio = (1/2) * (19/30) = 19/60

C's share = 1/5 or 12/60

D's share = 1/6 or 10/60

New profit sharing ratio of A : B : C : D = 19 : 19 : 12 : 10