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A and B share profits in the ratio 10:3. They admit C for a 1/13 share of the total profits, which is surrendered by A and B in the ratio 3:2. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 47:13:5

Under the old ratio 10:3, A and B receive 10/13 and 3/13, respectively. C’s 1/13 share is sacrificed by A and B in the ratio 3:2, so A sacrifices 3/65 and B sacrifices 2/65. Therefore, the new shares are A = 10/13 − 3/65 = 47/65, B = 3/13 − 2/65 = 13/65, and C = 1/13 = 5/65. Hence, the new profit-sharing ratio is 47:13:5. Exam tip: Convert the old shares to a common denominator before subtracting the sacrificed shares.

Related tags

AccountancyAdmission Of PartnerSacrificing RatioNew Profit Sharing RatioPartnership AccountsReconstitution Admission Of A PartnerClass 12 Mcq

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