Question

D and H are partners in a firm sharing profits in the ratio of 3 : 2. They admit A as a partner for 1/4th share in the profits. A acquires his share from D and H in the ratio of 1 : 2. The new profit-sharing ratio will be:

• A. 3 : 2 : 1
• B. 14 : 15 : 31
• C. 31 : 14 : 15
• D. 31 : 15 : 14

Answer 1

The correct option is C 31 : 14 : 15

D’s old share = $\frac{3}{5}$

H’s old share = $\frac{2}{5}$

A is admitted for $\frac{1}{4}$ share

D’s sacrifice = $\frac{1}{4}$ $\times \frac{1}{3}$ = $\frac{1}{12}$

H’s sacrifice = $\frac{1}{4}$ $\times \frac{2}{3}$ = $\frac{2}{12}$

New profit sharing ratio is:

D = $\frac{3}{5}$ $-\frac{1}{12}$ = $\frac{31}{60}$

H = $\frac{2}{5}$ $-\frac{2}{12}$ = $\frac{14}{60}$

A = $\frac{1}{4}$ $\times \frac{15}{15}$ = $\frac{15}{60}$

D : H : A :: 31 : 14 : 15