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The new profit-sharing ratio of three partners A, B and C is 5:3:2. What is C’s share of the profit under this ratio?

Answer and explanation

Correct answer: \(\frac{1}{5}\)

The total ratio is \(5+3+2=10\). C’s ratio share is 2, so C’s share of the profit is \(\frac{2}{10}=\frac{1}{5}\). Option B incorrectly uses 5 as the denominator instead of the total ratio. Exam tip: Divide a partner’s ratio by the sum of all partners’ ratio terms to find that partner’s profit share.

Related tags

New Profit Sharing RatioAdmission Of A PartnerRatio ConversionPartner ShareReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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