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A and B share profits in the ratio 5:2. C is admitted for a 1/7 share of the total profit, which is surrendered by A and B in the ratio 2:5. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 33:9:7

A’s old share is 5/7 and B’s old share is 2/7. Out of C’s 1/7 share, A sacrifices \(1/7 \times 2/7=2/49\) and B sacrifices \(1/7 \times 5/7=5/49\). Thus, A’s new share is \(35/49-2/49=33/49\), B’s is \(14/49-5/49=9/49\), and C’s is \(7/49\). Therefore, the new ratio is 33:9:7. Exam tip: divide the incoming partner’s share according to the sacrificing ratio and subtract those amounts from the old partners’ shares.

Related tags

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

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