Question

A and B who shared profits in the ratio 3:2 admit c as a partner for 1/5 share i. Profits which he acquires equally from old partners. What is the new profit sharing ratio.

Answer 1

Old ratio (A and B) = 3 : 2

C is admitted for 1/5 th share

A's sacrifice in favour of C = (1/5) x (1/2) = (1/10)

B's sacrifice in favour of C = (1/5) x (1/2) = (1/10)

New ratio = Old ratio - Sacrificing ratio

A's new ratio = (3/5) - (1/10) = 5/10 or 1/5

B's new share = (2/5) - (1/10) = 3/10

C's share = A's sacrifice + B's sacrifice

                = (1/10) + (1/10) 

                =  2/10

Therefore, new profit sharing ratio of A, B and C is 5 : 3 : 2