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Geeta and Harish share profits equally. Ira is admitted as a partner for \(\frac{1}{6}\) of the profits. If Ira’s share is sacrificed equally by both old partners, what will be Geeta’s new share of profit?

Answer and explanation

Correct answer: \(\frac{5}{12}\)

Geeta’s old profit share was \(\frac{1}{2}\). Since Ira’s \(\frac{1}{6}\) share is sacrificed equally by the two old partners, Geeta sacrifices \(\frac{1}{6} \div 2=\frac{1}{12}\). Therefore, Geeta’s new share is \(\frac{1}{2}-\frac{1}{12}=\frac{5}{12}\). \(\frac{1}{2}\) is her old share, not her new share. Exam tip: When a new partner’s share is sacrificed equally, divide that share by the number of sacrificing old partners to find each partner’s sacrifice.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrifice RatioPartnership AccountsClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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