a and b are partners sharing profits and losses in the ratio of 5:3. They admit C who will receive 1/4th share in future profits which he receives equally from A and B. Calculate new ratio and sacrificing ratio?

Solution :

★ Old Ratio :

A : B = 5 : 3

• A's Share = 5/8
• B's Share = 3/8

They admit C who will receive 1/4th share in future profits.

• C's Share = 1/4

Which he receives equally from A and B.

A's Sacrifice = 1/4 × 1/2 = 1/8

B's Sacrifice = 1/4 × 1/2 = 1/8

★ New profit sharing ratio :

• A's new share =

⇒ 5/8 - 1/8 = 4/8

• B's new share =

⇒ 3/8 - 1/8 = 2/8

• C's share =

⇒ 1/4 × 2/2 = 2/8

New profit sharing ratio =

• A : B : C
• 4/8 : 2/8 : 2/8

⇒ 4 : 2 : 2 = 2 : 1 : 1

New profit sharing ratio =

A : B : C = 2 : 1 : 1

★ Sacrificing ratio :

• A's Sacrifice = 1/8

• B's Sacrifice = 1/8

• A : B
• 1/8 : 1/8

⇒ 1 : 1

Therefore,

New profit sharing ratio =

A : B : C = 2 : 1 : 1 and Sacrificing ratio = A : B = 1 : 1