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A and B share profits in the ratio 4:5. C is admitted for a 1/6 share of the total profit, which is surrendered equally by A and B from their respective shares. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 13:17:6

Under the old ratio, A's and B's shares are 4/9 and 5/9 respectively. Since C receives 1/6 of the total profit equally from A and B, each partner sacrifices 1/12. Thus, A's new share is 4/9 − 1/12 = 13/36, B's new share is 5/9 − 1/12 = 17/36, and C's share is 1/6 = 6/36. Therefore, the new ratio is 13:17:6. Exam tip: When the sacrifice is equal, subtract the same amount from each existing partner's share.

Related tags

Equal SacrificeNew Profit Sharing RatioAdmission Of PartnerAccountancy Class 12Reconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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