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A and B share profits in the ratio 5:3. C is admitted for a \(1/4\) share of profits, and A’s new share after admission is \(3/8\). What will be B’s new share of profits?

Answer and explanation

Correct answer: \(3/8\)

The total profit share is \(1\). Therefore, B’s new share is \(1-3/8-1/4=1-6/8-2/8=3/8\). Under the old ratio, B’s share was also \(3/8\), so B’s share remains unchanged after the admission. The value \(1/4\) represents C’s share, not B’s. Exam tip: subtract the known partners’ new shares from the total share of \(1\) to find the remaining partner’s share.

Related tags

New Share CalculationAdmission Of PartnerProfit Sharing RatioGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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