Question

Following is the balance sheet of A, B, and C who share profits and losses of the business in the ratio of 3:2:1.

Additional Information:
a. On 1st April, 2021, they admitted D as a partner for 1/4th for which he brought ₹1,20,000 as his capital and ₹30,000 as a share of goodwill.
b.The value of furniture has increased by 10%.
c. Market value of investments brought down to ₹2,00,000.

Calculate the new profit sharing ratio:

[2 marks]

• A. 3 : 2 : 1 : 1
• B. 3 : 3 : 2 : 2
• C. 3 : 2 : 1 : 2
• D. 2 : 1 : 2 : 1

Answer 1

The correct option is C 3 : 2 : 1 : 2

Let the total share be 1
Total share of A, B, and C after D's admission = 1$-\frac{1}{4}$ = $\frac{3}{4}$
1 -1/4 = 3/4 New Ratio = Old Ratio x Remaining Share
A = $\frac{3}{6}$ $\times \frac{3}{4}$ = $\frac{9}{24}$

B =$\frac{2}{6}$ $\times \frac{3}{4}$ = $\frac{6}{24}$

C =$\frac{1}{6}$ $\times \frac{3}{4}$ = $\frac{3}{24}$

D = $\frac{1}{4}$ $\times \frac{6}{6}$ = $\frac{6}{24}$

A : B : C : D :: 9 : 6 : 3 : 6 or 3 : 2 : 1 : 2