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Manu and Tanu share profits in the ratio 2:3. Janu is admitted as a partner for a 1/5 share of the profits. If Janu’s share is acquired equally from Manu and Tanu, that is, 1/10 from each, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Manu : Tanu : Janu = 3:5:2

Manu’s new share = 2/5 − 1/10 = 4/10 − 1/10 = 3/10. Tanu’s new share = 3/5 − 1/10 = 6/10 − 1/10 = 5/10. Janu’s share is 1/5 = 2/10. Therefore, the new ratio is 3/10 : 5/10 : 2/10 = 3:5:2. Option B is not an equivalent form of this ratio; 4:6:2 has a different proportion. Exam tip: subtract the sacrifice made by each existing partner from their old share, add the new partner’s share, and then simplify the ratio.

Related tags

Admission Of A PartnerNew Profit Sharing RatioProfit Sharing RatioSacrifice RatioClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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