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A and B share profits in the ratio 5:3. C receives a 1/8 share taken equally from A and B. What is the new ratio?

Answer and explanation

Correct answer: 9:5:2

The direct answer is 9:5:2, so option A is correct. C’s share is 1/8, and it is taken equally from A and B. Therefore each old partner sacrifices half of 1/8, or 1/16. Convert the old shares to sixteenths: A’s 5/8 equals 10/16, and B’s 3/8 equals 6/16. After sacrifice, A has 10/16−1/16=9/16, while B has 6/16−1/16=5/16. C has 1/8=2/16. Thus the new ratio is 9:5:2. The total 9+5+2=16 confirms that the shares represent the whole profit. Option B does not deduct the sacrifice. Option C gives the old partners an incorrect reduction and does not represent C’s one-eighth share properly. Option D assigns C 1/16 instead of 2/16. The common confusion is to subtract 1/8 from each partner; that would transfer 1/4 in total, twice the amount C should receive. Equal taking means each gives 1/16.

Related tags

Equal-SacrificeNew-Profit-Sharing-RatioAdmissionPartnership-AccountsNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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