A and B are partners sharing profits and losses

3 :- A and B are partners sharing profits and losses in the proportion of 7 : 5. They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He takes this share as 1/24th from A and 1/8th from B. Calculate new profit sharing ratio.

Solution:- Calculation of new profit share of A, B and C
Old ratio = 7:5
C’s share in profit is 1/6
A’s new share = 7/12 – 1/24 = 13/24
B’s new share = 5/12 – 1/8 = 7/24
C’s share = 1/6 x 4/4 = 4/24
Thus, new PSR of A, B and C is 13:7:4