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Ajay and Vijay share profits in the ratio 3:1. Sanjay is admitted for a 1/8 share. If Ajay sacrifices 1/16 and Vijay sacrifices 1/16, what is the new ratio?

Answer and explanation

Correct answer: Ajay:Vijay:Sanjay = 11:3:2

The governing rule is that a continuing partner’s new share equals the old share minus the sacrifice made for the incoming partner. Ajay’s old share is 3/4 = 12/16. After sacrificing 1/16, his new share is 11/16. Vijay’s old share is 1/4 = 4/16; after sacrificing 1/16, his new share is 3/16. Sanjay receives 1/8 = 2/16. Comparing all shares with denominator 16 gives Ajay:Vijay:Sanjay = 11:3:2. Therefore option A is correct. The other options either fail to subtract the stated sacrifices, assign an incorrect continuing share, or do not preserve the total profit. Indeed, 11/16 + 3/16 + 2/16 = 1, confirming the result.

Related tags

New Profit Sharing RatioSacrificePartner AdmissionAccountancyNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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