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A and B share profits in the ratio 3:7. C is admitted for a 1/10 share of the total profits, taken entirely from B’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 3:6:1

The old ratio 3:7 means A’s share is 3/10 and B’s share is 7/10. Since C’s 1/10 share is taken entirely from B, A’s share remains 3/10, while B’s new share becomes 7/10 − 1/10 = 6/10. Therefore, A:B:C = 3/10:6/10:1/10 = 3:6:1. Exam tip: when the new partner’s share is taken from only one existing partner, reduce only that partner’s share.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrificing SharePartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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