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A and B share profits in the ratio 6:5. C is admitted for a 1/11 share of profits, acquired entirely from A’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 5:5:1

The total of the old ratio 6:5 is 11, so A’s old share is 6/11 and B’s is 5/11. Since C’s 1/11 share is acquired entirely from A, A’s new share becomes 6/11 − 1/11 = 5/11. B’s share remains 5/11, while C receives 1/11. Hence, the new ratio is 5:5:1. Exam tip: If the incoming partner obtains the entire share from one existing partner, deduct that share only from that partner’s old share.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrifice RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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