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A and B share profits in the ratio 4:9. C is admitted with a 2/13 share of profits, which is given entirely by B. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 4:7:2

The old ratio of 4:9 means that A and B have shares of 4/13 and 9/13, respectively. Since C receives 2/13 entirely from B, B’s new share becomes 9/13 − 2/13 = 7/13, while A’s share remains 4/13. Therefore, the new ratio of A, B and C is 4/13:7/13:2/13 = 4:7:2. Exam tip: When a new partner acquires the entire share from one old partner, only that partner’s share is reduced.

Related tags

New Profit Sharing RatioAdmission Of PartnerSacrifice RatioPartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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