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A and B share profits in the ratio 5:2. They admit C for a \(\frac{1}{7}\) share of the total profits, which is surrendered by A and B in the ratio 2:5. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 33:9:7

C’s share is \(\frac{1}{7}=\frac{7}{49}\). In the sacrificing ratio 2:5, A sacrifices \(\frac{2}{49}\) and B sacrifices \(\frac{5}{49}\). Their old shares were \(\frac{5}{7}=\frac{35}{49}\) and \(\frac{2}{7}=\frac{14}{49}\), respectively. Thus, A’s new share is \(\frac{33}{49}\), B’s is \(\frac{9}{49}\), and C’s is \(\frac{7}{49}\), giving the ratio 33:9:7. Exam tip: Distribute the incoming partner’s share in the sacrificing ratio and subtract each sacrifice from the respective old share.

Related tags

Sacrificing RatioNew Profit Sharing RatioAdmission Of PartnerPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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