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Vinay and Sanjay share profits in the ratio 1:2. Arpita is admitted for a 1/6 share of profits, which is taken from Vinay and Sanjay in their old ratio. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Vinay : Sanjay : Arpita = 5:10:3

After giving Arpita a 1/6 share, the old partners retain a total of 5/6. Since this retained share is divided in the old ratio 1:2, Vinay’s new share is \(\frac{5}{6}\times\frac{1}{3}=\frac{5}{18}\), while Sanjay’s is \(\frac{5}{6}\times\frac{2}{3}=\frac{10}{18}\). Arpita’s share is \(\frac{1}{6}=\frac{3}{18}\). Thus, the new ratio is 5:10:3. Exam tip: If the incoming partner’s share is taken from the old partners in their old ratio, distribute the remaining share in that same ratio.

Related tags

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

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