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A and B share profits in the ratio 2:3. C is admitted for a 1/4 share of the profits, which A and B sacrifice in the ratio 1:3. What is the new profit-sharing ratio?

Answer and explanation

Correct answer: 27:33:20

A’s old share is 2/5 and B’s is 3/5. Of C’s 1/4 share, A sacrifices 1/16 and B sacrifices 3/16, because the sacrifice is divided in the ratio 1:3. Therefore, A’s new share is 2/5 − 1/16 = 27/80, B’s is 3/5 − 3/16 = 33/80, and C’s is 1/4 = 20/80. The new profit-sharing ratio is 27:33:20.

Related tags

New Profit-Sharing RatioAdmission Of A PartnerNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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