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If the old partners’ combined new profit share is \(\frac{3}{4}\) and they divide it in the ratio \(2:1\), what will be the new profit share of the second old partner?

Answer and explanation

Correct answer: \(\frac{1}{4}\)

In the ratio \(2:1\), the second old partner receives 1 part out of a total of 3 parts, so the fraction of the combined share is \(\frac{1}{3}\). Therefore, the partner’s new profit share is \(\frac{3}{4}\times\frac{1}{3}=\frac{1}{4}\). Option A is the first partner’s share, calculated as \(\frac{3}{4}\times\frac{2}{3}=\frac{1}{2}\). Exam tip: first convert the individual ratio part into a fraction of the total ratio, then multiply it by the combined share.

Related tags

Admission Of PartnerNew Profit Sharing RatioOld PartnersProfit Sharing RatioClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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