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A and B share profits in the ratio 5:8. C is admitted and receives a 2/13 share entirely from A’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: \(3:8:2\)

The old ratio of A and B is 5:8, so A’s original share is \(5/13\) and B’s share is \(8/13\). Since C receives \(2/13\) entirely from A, A’s new share becomes \(5/13-2/13=3/13\). B’s share remains \(8/13\), while C receives \(2/13\). Therefore, the new profit-sharing ratio is \(3:8:2\). Exam tip: When an incoming partner obtains the entire share from one old partner, only that partner’s share is reduced.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrifice By One PartnerPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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