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A and B share profits in the ratio 10:7. C is admitted and receives a 3/17 share of profit exclusively from A’s share. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 7:7:3

The old shares of A and B are 10/17 and 7/17 respectively. Since C receives 3/17 exclusively from A, A’s new share becomes 10/17 − 3/17 = 7/17, while B’s share remains 7/17. Therefore, the new ratio is 7/17 : 7/17 : 3/17 = 7:7:3. Exam tip: When the incoming partner obtains the share from only one old partner, subtract the sacrificed share only from that partner’s share.

Related tags

Admission Of PartnerNew Profit Sharing RatioProfit SacrificePartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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