A, B and C are partners in a firm sharing profits in the ratio of . D is admitted into the firm for th share in profits, which he gets as th from A and th from B. The total capital of the firm is agreed upon as and D is to bring in cash equivalent to th of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of A, B and C after all adjustments are , and respectively.The New Profit Sharing Ratio in this case is:
- A9:5:4:2
- B9:5:4:6
- C9:4:3:2
- D9:3:4:7
Solution & Step-by-step Explanation
Let's calculate the new profit shares by deducting each partner's sacrifice:Original configuration fractions:
A's New Share:
B's New Share:
C's New Share (remains unchanged):
D's New Share:
Combining these gives a New Profit Sharing Ratio of .
A's New Share:
B's New Share:
C's New Share (remains unchanged):
D's New Share:
Combining these gives a New Profit Sharing Ratio of .