Profit sharing ratioo

I am sorry, if I interpret the question in a wrong way. So, here is the solution for you.

VIJAYA SARADHI MAGANTI

CA Inter

★ 850

12-Sep-20 22:49

Did you try solving? What is the doubt?

CA Suraj Lakhotia

Admin

12-Sep-20 09:00

A,B,C shares in profit are 0.5,0.3,0.2. C takes 1/10th(0.1) share from B. New A,B,C Shares are 0.5,0.3-0.1,0.2+0.1 = 0.5,0.2,0.3 = 5:2:3

VIJAYA SARADHI MAGANTI

CA Inter

★ 850

12-Sep-20 09:48

Current shares of A,B,C are 0.5,0.3,0.2 So in future B and C share should become 0.5 and 0.3 For that B should gain 0.2 and C should gain 0.1 from A If A sacrifices (0.2+0.1=0.3) his share will be 0.5-0.3= 0.2. Therefore, New ratio will be 0.2:0.5:0.3= 2:5:3. Here one of the misconception you may generally have is Previous ratio of B:C is 3:2 it should become 5:3. So, we should subtract (3/5 - 5/8), (2/5 - 3/8) you should not put it in this way because in this scenario you are not considering the other partner A. If you distribute in 3/5 and 2/5 then it is 0.6 and 0.4 then there is no space for A it means you are assuming only two partners B and C. From the above ratio, 0.600(3/5) to 0.625(5/8) and 0.400(2/5) to 0.375(3/8) then new ratio total is 0.625+0.375=1 then there is no space for A. So, when there are three partners you should consider all of them as a whole at a time while calculating a new ratio. Hope it helps!!!

VIJAYA SARADHI MAGANTI

CA Inter

★ 850

12-Sep-20 10:44