A and B are partners in a partnership firm, sharing profits in 3 : 2 ratio. They agreed to admit new partner C. A sacrifices 1/6 share of the total profit from his share and B sacrifices 1/4 share of the total profit from his share in favour of C. Calculate new profit sharing ratio between A, B and C.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 26 : 9 : 25
Old shares: A = 3/5, B = 2/5. Each partner gives C a fixed share of the total profit out of his own share.
A’s new share = 3/5 − 1/6 = 18/30 − 5/30 = 13/30
B’s new share = 2/5 − 1/4 = 8/20 − 5/20 = 3/20
C’s share = 1/6 + 1/4 = 2/12 + 3/12 = 5/12
With the common denominator 60: A = 26/60, B = 9/60, C = 25/60, so the new ratio is 26 : 9 : 25