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A and B share profits in the ratio 8:7. C is admitted for a \(1/5\) share of the total profit, and the remaining profit is shared in the old ratio. What will be B’s new share of profit?

Answer and explanation

Correct answer: \(\frac{28}{75}\)

C receives \(1/5\) of the total profit, so the portion left for A and B is \(1-1/5=4/5\). B’s old share was \(7/(8+7)=7/15\). Therefore, B’s new share is \(\frac{4}{5}\times\frac{7}{15}=\frac{28}{75}\). The value \(7/15\) represents B’s old share before C’s admission, not the new share. Exam tip: First calculate the profit left for the old partners, then multiply it by the concerned partner’s old fraction.

Related tags

Partner AdmissionNew Profit Sharing RatioOld Partners ShareProfit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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