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A and B share profits in the ratio 5:3. C is admitted for a 1/4 share of profits, which is sacrificed by A and B from their old shares. If A’s new share is 1/2, what is B’s sacrifice?

Answer and explanation

Correct answer: 1/8

A’s old share was 5/8 and his new share is 1/2. Therefore, A’s sacrifice is 5/8 − 1/2 = 1/8. Since C receives 1/4 of the profits, the total sacrifice of A and B is 1/4. Hence, B’s sacrifice = 1/4 − 1/8 = 1/8. Option B is incorrect because 1/4 is the combined sacrifice of A and B, not B’s individual sacrifice. Exam tip: The new partner’s share equals the total sacrifice made by the old partners.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrificing RatioClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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