'P' and 'Q' are partners sharing profits in the ratio of 5: 3. They admitted 'R' giving him 3/10th share of profit. If 'R' acquires 1/5th share from 'P' and 1/10th from 'Q', New profit sharing ratio will be

The correct answer is - 17 : 11 : 12

Key Points

• New Profit Sharing Ratio
  • The existing profit-sharing ratio between P and Q is 5:3.
  • R is admitted with a 3/10th share of the profit.
  • R acquires 1/5th share from P and 1/10th share from Q.
  • Calculate the new shares:
    • P's new share = 5/8 - 1/5 = 25/40 - 8/40 = 17/40.
    • Q's new share = 3/8 - 1/10 = 15/40 - 4/40 = 11/40.
    • R's share is already 3/10 = 12/40.
  • Therefore, the new profit-sharing ratio is 17 : 11 : 12.

Additional Information

• Calculation of Profit Sharing Ratios
  • When a new partner is admitted, the existing partners may sacrifice a portion of their profit share in favor of the new partner.
  • The sacrifice is calculated based on the new partner's share and the agreed terms among the partners.
• Understanding the Ratio Simplification
  • To determine the new profit-sharing ratio, the shares must be simplified to the smallest whole numbers.
  • In this case, the simplified form of 17/40, 11/40, and 12/40 is 17:11:12, showing the new distribution of profits among the partners.