A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. D is admitted into firm for $\frac{1}{4}$th share of profit, which he gets $\frac{1}{8}$ from A and $\frac{1}{8}$ from B. Calculate new profit sharing ratio of all the partners.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) - 9 : 5 : 4 : 6.
A, B and C = 3 : 2 : 1.
D is admitted into firm for $\frac{1}{4}$th share of profit, which he gets $\frac{1}{8}$ from A and $\frac{1}{8}$ from B.
A's new share = 3/6 -1/8
= (12-3)/24
= 9/24
B's new share = 2/6 - 1/8
= (8-3)/24
= 5/24
C's share will be as old share = 1/6 or 4/24
D's share = 1/4 or 6/24
New ratio = 9/24 : 5/24 : 4/24 : 6/24
= 9:5:4:6