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A and B share profits in the ratio 11:4. C is admitted for a 1/5 share, which is taken entirely from A’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 8:4:3

The old ratio of 11:4 gives A a share of 11/15 and B a share of 4/15. C’s share of 1/5 equals 3/15 and is taken entirely from A. Therefore, A’s new share is 11/15 − 3/15 = 8/15, while B remains at 4/15 and C receives 3/15. Hence, the new ratio is 8:4:3. Exam tip: Convert the old ratio into fractional shares first, then deduct the incoming partner’s share only from the sacrificing partner.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrificing PartnerPartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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