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A and B share profits in the ratio 7:2. C is admitted for a \(1/3\) share of the total profit. If the remaining profit is shared by A and B in their old ratio, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 14:4:9

C receives \(1/3=9/27\) of the total profit, leaving \(2/3\) for A and B. A receives \(\frac{2}{3}\times\frac{7}{9}=\frac{14}{27}\), while B receives \(\frac{2}{3}\times\frac{2}{9}=\frac{4}{27}\). Therefore, the new ratio A:B:C is 14:4:9. Exam tip: Subtract the incoming partner’s share from 1, then distribute the remainder among the old partners in their old ratio.

Related tags

New Profit Sharing RatioAdmission Of PartnerBalance ProfitOld RatioAccountancyReconstitution Admission Of A PartnerClass 12 Mcq

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