A and B are partners in a business sharing profits and losses in the ratio of 7:3 respectively. They admit C as a new partner. A sacrificed 1/7th share of his profit and B sacrificed 1/3rd of his share in favour of C. The new profit sharing ratio of A, B and C will be:

3:1:1

The correct answer is option 1- 3:1:1.

Old ratio = 7:3
C admits.
A sacrificed 1/7th share of his profit and B sacrificed 1/3rd of his share in favour of C.

Sacrifice of A = 1/7 x 7/10
                     = 1/10
Sacrifice of B = 1/3 x 3/10
                     = 1/10

New Share of A = 7/10 - 1/10
                          = 6/10 or 3/5
New Share of B = 3/10 - 1/10
                         = 2/10 or 1/5
Share of C = 1/10 + 1/10
                  = 2/10 or 1/5

NEW PROFIT SHARING RATIO = 3/5 : 1/5 : 1/5
                                                   = 3:1:1