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If the new profit shares of three partners are 2/5, 2/5 and 1/5 respectively, what will be their new profit-sharing ratio?

Answer and explanation

Correct answer: 2:2:1

All the given shares have the common denominator 5. Therefore, 2/5 : 2/5 : 1/5 becomes 2:2:1 after comparing their numerators. Option D is incorrect because 5:5:5 represents equal shares, whereas the given shares are not equal. Exam tip: verify the ratio by checking the sum of its terms; here, 2+2+1=5.

Related tags

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

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