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Kiran and Varun share profits in the ratio \(2:3\). Naman is admitted for a \(\frac{1}{5}\) share of the total profit, taken entirely from Varun’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Kiran : Varun : Naman = \(2:2:1\)

Under the old ratio \(2:3\), Kiran’s share is \(\frac{2}{5}\) and Varun’s share is \(\frac{3}{5}\). Since Naman’s \(\frac{1}{5}\) share is taken entirely from Varun, Varun’s new share becomes \(\frac{3}{5}-\frac{1}{5}=\frac{2}{5}\). Therefore, the new ratio is \(\frac{2}{5}:\frac{2}{5}:\frac{1}{5}=2:2:1\). Exam tip: reduce the share only of the partner who sacrifices it; the other existing partner’s share remains unchanged.

Related tags

AdmissionNew-Profit-Sharing-RatioSacrificing-SharePartnership-AccountingClass-12New Profit Sharing RatioReconstitution Admission Of A PartnerAccountancy

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