A, B, C were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. They admit D into partnership. B surrenders 1/3 of his share and C surrenders 1/4 of his share in favour of D. Calculate new profit sharing ratio.
Answer & explanation
Correct answer: option 1
The correct answer is Option 1 - 16 : 8 : 9 : 7.
Old ratio = 4:3:3
D admit in the firm.
B sacrifices = 3/10 x 1/3
= 3/30
C sacrifices = 3/10 x 1/4
= 3/40
D's share = 3/30 + 3/40
= (12+9)/120
= 21/120
A's share = 4/10
B's new share = 3/10 - 3/30
= (9-3)/30
= 6/30
C's new share = 3/10 - 3/40
= (12-3)/40
= 9/40
New ratio = 4/10 : 6/30 : 9/40 : 21/120
= 48/120 : 24/120 : 27/120 : 21/120
= 48:24:27:21
= 16:8:9:7