Question
Download Solution PDFX and Y are partners in a business sharing profit and losses in the ratio of 3 : 2. They admit Z as a new partner with 1 / 5 share in the profits. Calculate the new profit sharing ratio of the partners.
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFOld Profit Sharing Ratio (X and Y) = 3:2
Z is admitted for a 1/5th share.
New Profit Sharing Ratio (X and Y) = 1 - 1/5 = 4:5
A's New Profit Sharing Ratio = 3/5 * 4/5 = 12/25
B's New Profit Sharing Ratio = 2/5 * 4/5 = 8/25
A: B: C = 12/25: 8/25: 1/5
Using the L.C.M method to make denominators common,
New Profit Sharing Ratio Of A:B: C is 12:8:5
Thus, option 1 is the correct answer.
Last updated on Jun 12, 2025
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