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A and B share profits in the ratio 4:7. C is admitted for a 2/11 share of the profits, which is sacrificed by A and B in the ratio 1:3. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 7:11:4

A’s old share is 4/11 and B’s old share is 7/11. C’s 2/11 share is sacrificed in the ratio 1:3, so A sacrifices 1/22 and B sacrifices 3/22. Therefore, A’s new share is 8/22−1/22=7/22, B’s is 14/22−3/22=11/22, and C’s share is 4/22. Hence, the new ratio is 7:11:4. Exam tip: Subtract each existing partner’s sacrifice from the old share and assign the incoming partner’s share directly.

Related tags

Sacrificing RatioAdmission Of PartnerNew Profit Sharing RatioPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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