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A and B share profits in the ratio 4:3. C is admitted for a 1/7 share, which is acquired from A and B in the sacrificing ratio 3:4. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 25 : 17 : 7

Since the old ratio is 4:3, A and B's old shares are 4/7 and 3/7 respectively. C's 1/7 share is acquired in the sacrificing ratio 3:4, so A sacrifices 3/49 and B sacrifices 4/49. Therefore, A's new share is 4/7 − 3/49 = 25/49, B's new share is 3/7 − 4/49 = 17/49, and C's share is 1/7 = 7/49. Hence, the new ratio is 25:17:7. Exam tip: Subtract each old partner's sacrifice from their old share, then include the incoming partner's share.

Related tags

Sacrificing RatioNew Profit Sharing RatioAdmission Of PartnerPartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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