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A and B share profits in the ratio 5:1. C is admitted as a partner for a 1/6 share of profits. C’s entire share is acquired equally from A and B, that is, 1/12 from each. What will be B’s new share of profit?

Answer and explanation

Correct answer: B’s new profit share will be 1/12

B’s old share was 1/6 because A and B shared profits in the ratio 5:1. B sacrifices 1/12 in favour of C, so B’s new share = 1/6 − 1/12 = 2/12 − 1/12 = 1/12. Therefore, option A is correct. Exam tip: Subtract the portion sacrificed by an old partner from that partner’s old share to find the new share.

Related tags

AccountancyAdmission-Of-PartnerNew-Profit-Sharing-RatioSacrifice-RatioPartnership-FundamentalsNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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