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Manu and Tanu share profits in the ratio 3:2. Janu is admitted for a 1/10 share of the profits. If both Manu and Tanu sacrifice 1/20 share each, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Manu : Tanu : Janu = 11 : 7 : 2

Manu’s old share is 3/5 and Tanu’s is 2/5. Converting them to twentieths gives 12/20 and 8/20. Therefore, Manu’s new share is 12/20 − 1/20 = 11/20, while Tanu’s new share is 8/20 − 1/20 = 7/20. Janu receives 1/10 = 2/20. Hence, the new ratio is 11:7:2. Option B does not correctly adjust the old ratio for the sacrifices. Exam tip: always verify that the new shares add up to the whole profit, here 20/20.

Related tags

Admission Of A PartnerNew Profit Sharing RatioSacrificing RatioClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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