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A and B share profits in the ratio 4:1. C is admitted as a partner for 1/10 of the total profit, and the remaining profit is shared in the old ratio. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 36:9:5

C receives 1/10 of the total profit, so the balance available to A and B is 9/10. This balance is divided in the old ratio 4:1: A receives 9/10 × 4/5 = 18/25 = 36/50, while B receives 9/10 × 1/5 = 9/50. C’s share is 1/10 = 5/50. Therefore, the new ratio is 36:9:5. Exam tip: first calculate the balance left for the old partners, then distribute it in their old ratio.

Related tags

New Profit Sharing RatioAdmission Of PartnerOld RatioRemaining ProfitPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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