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A and B share profits in (5:11). C gets (1/4) share in the sacrificing ratio (1:4). What is the new ratio?

Answer and explanation

Correct answer: 21:39:20

Since the old ratio is 5:11, A’s and B’s old shares are 5/16 and 11/16. C receives 1/4, so A sacrifices 1/20 and B sacrifices 1/5 because the sacrificing ratio is 1:4. Therefore, A’s new share is 5/16 − 1/20 = 21/80, B’s new share is 11/16 − 1/5 = 39/80, and C’s share is 1/4 = 20/80. Hence, the new ratio is 21:39:20. Exam tip: Subtract each old partner’s sacrifice and add the admitted partner’s share; verify that the resulting shares total 1.

Related tags

AccountancyAdmission Of PartnerSacrificing RatioNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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