Question

X and Y are sharing profits and losses in the ratio of 3 :2. Z is admitted with 1/5th share in profits of the firm which he gets from X. Now the new profit sharing ratio among X, Y and Z will be _________.

• A. $12:8:5$
• B. $8:12:5$
• C. $2:2:1$
• D. $2:2:2$

Answer 1

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

Old ratio ( X: Y) = 3 : 2

Z admitted for 1/5 share of profit

X sacrifices in favour of Z = 1/5

New ratio = Old ratio - sacrificing ratio

X's new share = (3/5) - (1/5)

= 2/5

Y's new share = (2/5) - 0

= 2/5

Z's share = 1/5

Therefore, new profit sharing ratio among X, Y and Z is 2 : 2 : 1