A, B and C were partners sharing profits and losses in the ratio of 5 : 3 : 2. They admitted D into partnership for 1/6th share in profits, half (1/2) of which was given by A and the remaining half was given by B and C in the ratio 3 : 2. The new profit sharing ratio will be :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 5 : 3 : 2 : 2
D’s share = 1/6; half of it comes from A and half from B and C in the ratio 3 : 2.
A’s sacrifice = 1/6 × 1/2 = 1/12
B’s sacrifice = 1/12 × 3/5 = 1/20; C’s sacrifice = 1/12 × 2/5 = 1/30
A’s new share = 5/10 − 1/12 = 30/60 − 5/60 = 25/60
B’s new share = 3/10 − 1/20 = 18/60 − 3/60 = 15/60
C’s new share = 2/10 − 1/30 = 12/60 − 2/60 = 10/60
D’s share = 1/6 = 10/60
New ratio = 25 : 15 : 10 : 10 = 5 : 3 : 2 : 2