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Raj and Taj share profits in the ratio 4:1. Dev is admitted for a \(\frac{1}{5}\) share of profits, which is taken entirely from Taj’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: Raj : Taj : Dev = 4:0:1

Raj’s old share was \(\frac{4}{5}\), and Taj’s old share was \(\frac{1}{5}\). Since Dev’s entire \(\frac{1}{5}\) share is taken from Taj, Taj’s new share becomes \(\frac{1}{5}-\frac{1}{5}=0\). Raj’s share remains unchanged. Therefore, the new ratio is \(\frac{4}{5}:0:\frac{1}{5}=4:0:1\). Exam tip: When a new partner’s share is taken entirely from one existing partner, deduct it fully from that partner’s old share.

Related tags

Admission Of PartnerNew Profit Sharing RatioProfit Sharing RatioAccountancyClass 12Reconstitution Admission Of A PartnerClass 12 Mcq

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