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Raj and Taj share profits in the ratio of 5:1. Dev is admitted for a 1/6 share, which is taken entirely from Taj’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Raj : Taj : Dev = 5 : 0 : 1

In the old ratio of 5:1, Raj’s share is 5/6 and Taj’s share is 1/6. Dev’s entire 1/6 share is taken from Taj, so Raj retains 5/6, Taj’s new share becomes zero, and Dev receives 1/6. Therefore, the new ratio is 5/6:0:1/6 = 5:0:1. Exam tip: When a new partner’s entire share is sacrificed by only one old partner, the shares of the other partners remain unchanged.

Related tags

Admission Of A PartnerNew Profit Sharing RatioSacrificing RatioPartnership AccountsClass 12Reconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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