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A and B share profits in the ratio 2:3. After C is admitted as a partner, the new profit-sharing ratio A:B:C becomes 3:6:3. What will be C’s new share of profit?

Answer and explanation

Correct answer: 1/4

The sum of the new profit-sharing ratio 3:6:3 is 12. C’s corresponding ratio part is 3, so C’s share is 3/12 = 1/4. The option 1/3 is incorrect because it results from using an incorrect total of 9 instead of 12. Exam tip: Divide the concerned partner’s ratio part by the sum of all the ratio parts.

Related tags

New Profit Sharing RatioAdmission Of PartnerPartner ShareProfit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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