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A and B shared profits in (4:5). The new ratio is (3:5:1). From whom did C's share come?

Answer and explanation

Correct answer: Only from A

The governing concept is comparison of each existing partner’s old share with the corresponding share in the new ratio. The old ratio 4:5 totals 9, so A originally had 4/9 and B had 5/9. The new ratio 3:5:1 also totals 9; therefore A now has 3/9, B has 5/9, and C receives 1/9. A’s reduction is 4/9 − 3/9 = 1/9, exactly equal to C’s share. B’s reduction is 5/9 − 5/9 = 0, meaning B has sacrificed nothing. Thus the whole of C’s share has come only from A, so option A is correct. Option B wrongly identifies B as the sacrificing partner, option C assumes equal sacrifice despite B’s unchanged share, and option D does not answer the source of C’s share.

Related tags

Source Of ShareNew RatioAdmissionNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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