Question

A and B are partners sharing profits in the ratio of 2:1. C is admitted into the firm for 1/4 share of profits. C brings in Rs. 20,000 in respect of his capital. The capitals of old partners A and B, after all adjustments relating to goodwill, revaluation of assets and liabilities, etc., are Rs. 45,000 and Rs. 15,000 respectively. It is agreed that partners' capitals should be according to the new profit sharing ratio. Determine the new profit sharing ratio.

• A. 6 : 3 : 2
• B. 2 : 1 : 1
• C. 2 : 1 : 2
• D. 1 : 2 : 1

Hint:

When partners' capitals are adjusted to the new ratio, always take total capital as the base and then distribute according to agreed ratio.

Answer 1

The Correct Option is A

Step 1: Total capital of firm.
Capital of A = Rs. 45,000.
Capital of B = Rs. 15,000.
Capital of C = Rs. 20,000.
Total Capital = 45,000 + 15,000 + 20,000 = Rs. 80,000.

Step 2: Calculate capital ratio.
A : B : C = 45,000 : 15,000 : 20,000.
Dividing by 5,000: A : B : C = 9 : 3 : 4.

Step 3: Adjust to new ratio.
Since C is admitted for 1/4th share, his ratio = 1/4 = 4 parts out of 16.
Remaining 12 parts are to be shared by A and B in 2:1 = 8 : 4.
So final ratio = A : B : C = 8 : 4 : 4 = 6 : 3 : 2.

Final Answer: \[ \boxed{6 : 3 : 2} \]