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Saral and Taral share profits in the ratio 5:3. Garima is admitted for a 1/8 share of the profits. Saral and Taral each sacrifice 1/16 of their share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Saral : Taral : Garima = 9:5:2

Since the old ratio 5:3 has a total of 8 parts, Saral’s share is 5/8 and Taral’s share is 3/8. After deducting the sacrifice, Saral’s new share is 5/8 − 1/16 = 9/16 and Taral’s new share is 3/8 − 1/16 = 5/16. Garima’s share is 1/8 = 2/16. Therefore, the new ratio is 9/16 : 5/16 : 2/16 = 9:5:2. Exam tip: subtract each partner’s sacrifice from that partner’s old share, not from the ratio numbers directly.

Related tags

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

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