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A and B share profits in the ratio 2:3. C is admitted as a partner for a 1/5 share of profits. If the new profit-sharing ratio of A, B and C is 2:2:1, what is B’s sacrificing share?

Answer and explanation

Correct answer: 1/5

B’s old share was 3/5 (from the old ratio 2:3), and B’s new share is 2/5 (from the new ratio 2:2:1). B’s sacrifice is the old share minus the new share: 3/5 − 2/5 = 1/5.

Related tags

Partnership AccountsNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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