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A and B share profits in the ratio 6:11. C is admitted and receives 3/17 of the profits equally from A and B. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 9:19:6

A and B’s old shares are 6/17 and 11/17, respectively. Since C receives 3/17 equally, A and B each sacrifice 3/34. Thus, A’s new share is 12/34 − 3/34 = 9/34, B’s new share is 22/34 − 3/34 = 19/34, and C’s share is 6/34. Therefore, the new ratio is 9:19:6. Exam tip: When the sacrifice is equal, subtract half of the incoming partner’s share from each existing partner’s share.

Related tags

AccountancyPartner AdmissionNew Profit Sharing RatioEqual SacrificePartnership FundamentalsReconstitution Admission Of A PartnerClass 12 Mcq

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