A, B, and C were partners in a firm sharing profits in the ratio of 8 : 4 : 3. B retires and his share is taken up equally by A and C. Find the new profit-sharing ratio.

SOLUTION

Old Ratio (A, B and C)  =  8 : 4 : 3
B retires from the firm.
His profit share  =  4/15

B’s share taken by A and C in ratio of 1: 1
Share taken by A = 4/15 × 1/2 = 2/15
Share taken by C = 4/15 × 1/2 = 2/15

New Ratio = Old Ratio + Share acquired from B
A’s New Share =  8/15+2/15 = 10/15 = 2/3
C’s New Share =  3/15+2/15 = 5/15 = 1/3
∴ New Profit Ratio (A and C)  =  2: 1


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