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A and B share profits in the ratio 4:5. C is admitted for a 2/9 share of the profit, and the remaining profit is shared between A and B in their old ratio. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 28:35:18

C receives 2/9 of the total profit, so the remaining share for A and B is 7/9. Since their old ratio 4:5 has a total of 9, A receives \(\frac{7}{9}\times\frac{4}{9}=\frac{28}{81}\) and B receives \(\frac{7}{9}\times\frac{5}{9}=\frac{35}{81}\). C’s share is \(\frac{2}{9}=\frac{18}{81}\). Therefore, the new ratio is 28:35:18. Exam tip: First calculate the remaining share, then distribute it among the old partners in their old ratio.

Related tags

New Profit Sharing RatioAdmission Of A PartnerReconstitution Of PartnershipOld RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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