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A and B are partners sharing profits and losses in the ratio 3:2.they admit c into the partnership and offer her 1/4 the share which she acquires in the ratio of 2/5 :3/5 from the old partners calculate New profit sharing ratio ?
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A and B are partners sharing profits and losses in the ratio 3:2.they ...
Introduction
When a new partner is admitted into an existing partnership, it is essential to calculate the new profit-sharing ratio. In this case, A and B share profits and losses in the ratio of 3:2 and admit C, who is offered a 1/4 share.
Current Profit Sharing Ratio
- A’s share = 3 parts
- B’s share = 2 parts
- Total parts = 3 + 2 = 5 parts
Share Offered to C
- C is offered a 1/4 share of the partnership.
- Remaining share = 1 - 1/4 = 3/4
Distribution of C's Share
- C’s share of 1/4 is distributed between A and B in the ratio of 2/5 : 3/5.
- A's share from C = (2/5) * (1/4) = 2/20 = 1/10
- B's share from C = (3/5) * (1/4) = 3/20
New Shares of A and B
- A's new share = Old share (3/5) - A's share from C
- A's new share = 3/5 - 1/10 = 6/10 - 1/10 = 5/10 = 1/2
- B's new share = Old share (2/5) - B's share from C
- B's new share = 2/5 - 3/20 = 8/20 - 3/20 = 5/20 = 1/4
Final Shares
- A's New Share = 1/2
- B's New Share = 1/4
- C's Share = 1/4
New Profit Sharing Ratio
- The new profit-sharing ratio becomes:
- A : B : C = 1/2 : 1/4 : 1/4
- To express in simplest form, multiply by 4:
- A : B : C = 2 : 1 : 1
Conclusion
The new profit-sharing ratio among A, B, and C is 2:1:1.
Community Answer
A and B are partners sharing profits and losses in the ratio 3:2.they ...
The new profit sharing ratio is 9:6:5
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A and B are partners sharing profits and losses in the ratio 3:2.they admit c into the partnership and offer her 1/4 the share which she acquires in the ratio of 2/5 :3/5 from the old partners calculate New profit sharing ratio ?
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A and B are partners sharing profits and losses in the ratio 3:2.they admit c into the partnership and offer her 1/4 the share which she acquires in the ratio of 2/5 :3/5 from the old partners calculate New profit sharing ratio ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A and B are partners sharing profits and losses in the ratio 3:2.they admit c into the partnership and offer her 1/4 the share which she acquires in the ratio of 2/5 :3/5 from the old partners calculate New profit sharing ratio ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing profits and losses in the ratio 3:2.they admit c into the partnership and offer her 1/4 the share which she acquires in the ratio of 2/5 :3/5 from the old partners calculate New profit sharing ratio ?.
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