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A and B share profits in the ratio 11:4. C is admitted for a 2/15 share of the profits, which is sacrificed by A and B in the ratio 5:1. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 28:11:6

C’s 2/15 share is sacrificed by A and B in the ratio 5:1. Therefore, A’s sacrifice is 2/15 × 5/6 = 1/9, and B’s sacrifice is 2/15 × 1/6 = 1/45. Expressing the old shares with denominator 45, A has 33/45 and B has 12/45. Their new shares are A = 33/45 − 5/45 = 28/45, B = 12/45 − 1/45 = 11/45, while C receives 6/45. Hence, the new ratio is 28:11:6. Exam tip: subtract each old partner’s sacrificing share from the old share and then include the incoming partner’s share.

Related tags

Sacrifice RatioNew Profit Sharing RatioAdmission Of PartnerPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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