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A and B share profits in the ratio 9:5. C is admitted for 1/7 of the total profit, and the remaining profit is shared between A and B in their old ratio. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 27:15:7

C receives 1/7 of the total profit, so 6/7 remains for A and B. This remainder is divided in their old ratio of 9:5. Therefore, A’s share is (6/7) × (9/14) = 27/49, and B’s share is (6/7) × (5/14) = 15/49. C’s share is 1/7 = 7/49. Hence, the new ratio is 27:15:7. Exam tip: When the incoming partner receives a specified share and the remainder is divided in the old ratio, multiply each old share by the remaining fraction.

Related tags

Admission Of PartnerNew Profit Sharing RatioOld RatioRemaining ProfitPartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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