Q.Ram and Shyam are partners sharing Profit and Loss equally. They have admitted Krishna as partner by giving him 1/5th share in future profits. Calculate the new profit sharing ratio.

Krishna is admitted for 1/5 share, so the old partners together retain 1 − 1/5 = 4/5. As Ram and Shyam continue to share equally, each takes half of 4/5 = 2/5. Expressing all shares over a common denominator of 5 gives the new ratio 2 : 2 : 1.

Working

• Krishna's share = 1/5.
• Remaining share for Ram and Shyam = 1 − 1/5 = 4/5.
• Ram and Shyam share this equally (old ratio 1:1): each gets 4/5 x 1/2 = 2/5. …