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A and B share profits in the ratio 3:2. C is admitted for a 1/5 share of the profits. If C acquires the entire share by taking 1/10 from A and 1/10 from B, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 5:3:2

A’s old share is 3/5 and B’s is 2/5. After giving up 1/10 each, their new shares are A = 3/5 − 1/10 = 1/2 and B = 2/5 − 1/10 = 3/10. C receives 1/10 + 1/10 = 1/5. Thus, the new ratio is 1/2 : 3/10 : 1/5 = 5:3:2.

Related tags

New Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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