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Anshu and Binu share profits in the ratio 7:5. Charu is admitted as a partner for a 1/6 share of profits. If Anshu and Binu surrender Charu’s share in their old ratio, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Anshu : Binu : Charu = 35:25:12

Charu’s share is 1/6, so the share remaining for the old partners is 1 − 1/6 = 5/6. This remaining share is divided between Anshu and Binu in their old ratio of 7:5. Anshu’s new share = 5/6 × 7/12 = 35/72, and Binu’s new share = 5/6 × 5/12 = 25/72. Charu’s share, 1/6, equals 12/72. Therefore, the new ratio is 35:25:12. Exam tip: Subtract the incoming partner’s share from 1 first, then distribute the remainder in the old ratio.

Related tags

Admission Of A PartnerNew Profit Sharing RatioOld RatioSacrificing RatioClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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