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Partners A and B have old and revised shares of 1/2 to 3/8 and 1/3 to 5/12, respectively. After the admission of new partner C, which partner is gaining on comparing the old and revised shares?

Answer and explanation

Correct answer: Only B

A’s share decreases from 1/2 to 3/8, so A is sacrificing. B’s share increases from 1/3 to 5/12; since 1/3 equals 4/12, B gains 1/12. Therefore, only B is gaining. Exam tip: an increase in the revised share indicates gain, while a decrease indicates sacrifice.

Related tags

Gaining PartnerShare ComparisonAdmission Of PartnerGoodwill AccountingAccountancy Class 12Goodwill AccountingReconstitution Admission Of A PartnerAccountancy

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