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A and B share profits in the ratio 4:11. C is admitted for a 2/15 share of profit, acquired entirely from B. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 4:9:2

The total of the old ratio 4:11 is 15, so A's share is 4/15 and B's share is 11/15. Since C acquires 2/15 entirely from B, B's new share becomes 11/15 − 2/15 = 9/15. Therefore, the new ratio A:B:C is 4/15:9/15:2/15 = 4:9:2. Exam tip: When the incoming partner acquires the entire share from only one old partner, the other old partner's share remains unchanged.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrifice Of SharePartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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