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A and B share profits in the ratio 3:2. After C is admitted, the new profit-sharing ratio becomes 4:3:3. What will be C’s share in the new profits?

Answer and explanation

Correct answer: \(\frac{3}{10}\)

The sum of the terms in the new profit-sharing ratio 4:3:3 is 10. C is represented by the third term, 3. Therefore, C’s share is \(\frac{3}{4+3+3}=\frac{3}{10}\). \(\frac{1}{3}\) is incorrect because the total of the ratio terms is 10, not 9. Exam tip: A partner’s share equals that partner’s ratio term divided by the sum of all ratio terms.

Related tags

New Partner ShareNew Profit Sharing RatioAdmission Of PartnerPartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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