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A and B share profits in the ratio 4:6. C is admitted for a 1/5 share, which is contributed by A and B in the sacrificing ratio 1:3. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 7:9:4

A and B originally have shares of 4/10 and 6/10, which are 8/20 and 12/20. C receives 1/5, or 4/20. Since the sacrificing ratio is 1:3, A sacrifices 1/20 and B sacrifices 3/20. Thus, A’s new share is 7/20, B’s is 9/20, and C’s is 4/20, giving the new ratio 7:9:4. Exam tip: subtract each old partner’s sacrifice from the old share and assign the admitted partner’s share accordingly.

Related tags

Sacrificing RatioAdmission Of PartnerNew Profit Sharing RatioPartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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