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The old partners A and B share profits in the ratio 16:9. C is admitted for a 1/5 share of profits, and both old partners sacrifice equally. What will be B’s new profit-sharing share?

Answer and explanation

Correct answer: \(\frac{13}{50}\)

C’s total share is \(1/5\). Since both old partners sacrifice equally, each sacrifices \(1/5 \div 2=1/10\). B’s old share is \(9/(16+9)=9/25\). Therefore, B’s new share is \(9/25-1/10=18/50-5/50=13/50\). Option B is only B’s old share and does not deduct the sacrifice. Exam tip: When sacrifice is equal, divide the incoming partner’s share by the number of sacrificing old partners to find each partner’s sacrifice.

Related tags

Equal SacrificeNew Profit Sharing RatioAdmission Of PartnerGoodwill AccountingPartnership NumericalsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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