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A and B share profits in the ratio 6:5. C is admitted for a 1/11 share of the total profit. If A and B sacrifice in the ratio 5:6, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 61:49:11

Since the old ratio is 6:5, A and B originally held 6/11 and 5/11, respectively. C’s 1/11 share is sacrificed in the ratio 5:6, so A sacrifices 5/121 and B sacrifices 6/121. Therefore, A’s new share is 66/121 − 5/121 = 61/121, B’s new share is 55/121 − 6/121 = 49/121, and C’s share is 11/121. Hence, the new ratio is 61:49:11. Exam tip: subtract each existing partner’s sacrifice from the old share and then express all shares with a common denominator.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrificing RatioPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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