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A and B share profits in the ratio 7:8. The new partner C receives 1/5 of the total profit equally from A and B. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 11:13:6

A and B’s old shares are 7/15 and 8/15. Since C receives 1/5 of the total profit equally from A and B, each old partner sacrifices 1/10. Thus, A’s new share is 7/15 − 1/10 = 11/30, B’s new share is 8/15 − 1/10 = 13/30, and C’s share is 1/5 = 6/30. Therefore, the new ratio is 11:13:6. Exam tip: When the sacrifice is equal, subtract the same amount from each old partner’s share.

Related tags

Equal SacrificeNew Profit Sharing RatioAdmission Of PartnerAccountancy Class 12Reconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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