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A and B share profits in the ratio 11:9. C is admitted for a 1/5 share of profits, which is sacrificed by A and B in the ratio 3:2. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 43:37:20

C’s share is 1/5, so A and B together sacrifice 1/5. In the sacrificing ratio 3:2, A sacrifices \(\frac{3}{25}\) and B sacrifices \(\frac{2}{25}\). Therefore, A’s new share is \(\frac{11}{20}-\frac{3}{25}=\frac{43}{100}\), and B’s new share is \(\frac{9}{20}-\frac{2}{25}=\frac{37}{100}\). C receives \(\frac{1}{5}=\frac{20}{100}\). Hence, the new profit-sharing ratio is 43:37:20. Option B does not correctly subtract the sacrificed portions from the old shares. Exam tip: Calculate each partner’s sacrifice first, then subtract it from the partner’s original share.

Related tags

Sacrificing RatioNew Profit Sharing RatioAdmission Of A PartnerPartnership AccountsAccountancy Class 12Reconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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