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The mutual new ratio of the two old partners is 1:3, and the new partner's share in profit is 1/5. What will be the new profit-sharing ratio in the order old partner : old partner : new partner?

Answer and explanation

Correct answer: 1:3:1

The new partner receives 1/5, so the two old partners together receive 1 − 1/5 = 4/5. Dividing this 4/5 in the ratio 1:3 gives 1/5 to the first old partner and 3/5 to the second. Therefore, the new ratio is 1/5:3/5:1/5 = 1:3:1. Exam tip: First find the combined share of the old partners, divide it according to their mutual ratio, and then simplify the resulting ratio.

Related tags

AdmissionNew-Profit-Sharing-RatioPartnership-AccountsClass-12New Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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