Marhumu and Yusuf are in partnership sharing profits and losses in the ratio of 2:1. On 31/3/2000, the partnership decided to admit Idris who is to take 1/4...
Question 1 Report
Marhumu and Yusuf are in partnership sharing profits and losses in the ratio of 2:1. On 31/3/2000, the partnership decided to admit Idris who is to take 1/4 of future profits without changing the ratio of Marhumu and Yusuf.
What is the new profit-sharing ratio of Marhumu and Yusuf?
Answer Details
Before admitting Idris, Marhumu and Yusuf shared the profits and losses in the ratio of 2:1, which can be represented as 2/3 for Marhumu and 1/3 for Yusuf.
Now Idris is to take 1/4 of future profits without changing the ratio of Marhumu and Yusuf. This means that the remaining profits will be shared between Marhumu and Yusuf in the same ratio of 2:1 as before.
The new profit-sharing ratio of Marhumu and Yusuf can be calculated as follows:
Let x be the share of the remaining profits that Idris does not take.
Then, Marhumu's share will be 2/3 of x, and Yusuf's share will be 1/3 of x.
Since Idris is taking 1/4 of the total profits, his share can be represented as 1/4, or 1/4 = x/(x + 3/4).
Solving for x, we get x = 3/16.
Therefore, Marhumu's share is 2/3 of 3/16, which is 1/8, or 12.5%.
And Yusuf's share is 1/3 of 3/16, which is 1/16, or 6.25%.
So the new profit-sharing ratio of Marhumu and Yusuf is 12.5% : 6.25%, which can be simplified to 50% : 25%.
Hence, the correct option is 50% : 25%.
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