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The new partner’s share of profit is \(\frac{1}{8}\). What will be the total remaining share of profit for the old partners?

Answer and explanation

Correct answer: \(\frac{7}{8}\)

The total profit is taken as \(1\). Therefore, the combined remaining share of the old partners is \(1-\frac{1}{8}=\frac{7}{8}\). Hence, \(\frac{7}{8}\) is correct. Exam tip: this question asks for the old partners’ combined remaining share, not their individual profit-sharing ratios.

Related tags

Admission Of PartnerNew Profit Sharing RatioRemaining ShareProfit SharingClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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