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A and B share profits in the ratio 4:5. C is admitted for a 1/9 share. A sacrifices 1/18. What will be the new ratio?

Answer and explanation

Correct answer: A:B:C = 7:9:2

The governing principle is that the incoming partner’s share is supplied through the sacrifices of the old partners. The old shares are A = 4/9 and B = 5/9. C receives 1/9, and A sacrifices 1/18. Therefore B must sacrifice the balance of C’s share: 1/9 − 1/18 = 1/18. A’s new share is 4/9 − 1/18 = 8/18 − 1/18 = 7/18. B’s new share is 5/9 − 1/18 = 10/18 − 1/18 = 9/18. C’s share is 1/9 = 2/18. Hence the new ratio is 7:9:2, so option A is correct. B ignores the required reductions, C reduces A incorrectly, and D merely preserves the old ratio.

Related tags

AdmissionSacrifice-RatioNew-Profit-Sharing-RatioPartnershipAccountancyNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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