Question

$A,B,C$ and $D$ were partners in a firm sharing in $5:3:2:2$ ratio. $B$ and $C$ retired from the firm. $B^{\prime }s$ share was acquired by $D$ and $C^{\prime }s$ share was acquired by $A$. Calculate new profit-sharing ratio of $A$ and $D$.

Answer 1

Old ratio (A, B, C and D) = 5: 3: 2: 2

B's profit share = 3/12

C's profit share = 2/12

B's share was acquired by D and C's share was acquired by A.

Therefore, D's new share = D's old share + Share of B = 2/12 +3/12 = 5/12

A's new share = A's old share + Share of C = 5/12 + 2/12 = 7/12

New profit share (A and D) = 7: 5