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A and B share profits in the ratio 2:7. C is admitted for a 2/9 share of the profit, and the remaining profit is shared between A and B in their old ratio. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 14:49:18

C receives 2/9, so the profit remaining for A and B is 1 − 2/9 = 7/9. This balance is divided in the old ratio 2:7: A receives (7/9) × (2/9) = 14/81 and B receives (7/9) × (7/9) = 49/81. C’s share, 2/9, equals 18/81. Therefore, the new ratio is 14:49:18. Exam tip: When the incoming partner receives a specified share and the balance remains with the old partners, multiply each old ratio fraction by the remaining share.

Related tags

New Profit Sharing RatioAdmission Of PartnerRemaining ProfitPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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