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A and B share profits in the ratio \(3:2\). The new partner C is admitted for a \(\frac{1}{5}\) share of the total profit. If A’s new share is \(\frac{7}{15}\), what is B’s new share?

Answer and explanation

Correct answer: \(\frac{1}{3}\)

Take the total profit as 1. A’s and C’s new shares are \(\frac{7}{15}\) and \(\frac{1}{5}=\frac{3}{15}\), respectively. Therefore, B’s share is \(1-\frac{7}{15}-\frac{3}{15}=\frac{5}{15}=\frac{1}{3}\). The old ratio \(3:2\) is not used directly because A’s and C’s new shares are already given. Exam tip: Always check that the sum of all partners’ new shares equals 1.

Related tags

Admission Of PartnerNew Profit Sharing RatioPartnership AccountingProfit Share CalculationReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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