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A and B shared profits in the ratio 5:4. The new ratio is 4:3:2. How did C’s share come from A and B?

Answer and explanation

Correct answer: By equal sacrifice

The governing concept is comparison of old and new shares after admission. Before C entered, A and B shared the total in the ratio 5:4, so A’s share was 5/9 and B’s was 4/9. The new ratio 4:3:2 totals 9, giving A 4/9, B 3/9, and C 2/9. A’s sacrifice is therefore 5/9 − 4/9 = 1/9. B’s sacrifice is 4/9 − 3/9 = 1/9. The combined sacrifice is 2/9, exactly equal to C’s new share. Since both A and B surrender the same amount, C’s share has come through equal sacrifice. Hence option A is correct; options B and C ignore one of the equal reductions, while D does not describe the calculated source.

Related tags

Equal SacrificeRatio ComparisonAdmissionNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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