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After the admission of a new partner, the old partners' combined new profit share is \(\frac{4}{5}\). If the old partners divide this combined share in the ratio \(3:1\), what will be the second old partner's new profit share?

Answer and explanation

Correct answer: \(\frac{1}{5}\)

The ratio \(3:1\) has a total of \(3+1=4\) parts. The second old partner receives 1 of these 4 parts, so the share is \(\frac{4}{5}\times\frac{1}{4}=\frac{1}{5}\). Option B represents the first partner's share, \(\frac{4}{5}\times\frac{3}{4}=\frac{3}{5}\). Exam tip: To divide a combined profit share in a ratio, multiply it by the required ratio part divided by the total ratio.

Related tags

Admission Of PartnerNew Profit Sharing RatioOld Partners Profit SharePartnership AccountingClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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