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A and B share profits in the ratio 6:7. C is given 4/13 of the profits, 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: 54:63:52

C’s share is 4/13, so the remaining share for A and B is 1 − 4/13 = 9/13. Distributing this remainder in the old ratio 6:7 gives A’s share as (9/13) × (6/13) = 54/169 and B’s share as (9/13) × (7/13) = 63/169. C’s share, 4/13, equals 52/169. Therefore, the new ratio is 54:63:52. Exam tip: When the incoming partner’s share is given and the remainder is divided in the old ratio, multiply the remainder by each old partner’s fractional share.

Related tags

Admission Of PartnerNew Profit Sharing RatioRemaining ProfitPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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