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Kajal and Payal share profits in the ratio 3:5. Riya is admitted as a partner for a \(1/8\) share of profits. Kajal and Payal sacrifice Riya’s share in the ratio 3:1. What will be Payal’s new profit share?

Answer and explanation

Correct answer: \(\frac{19}{32}\)

Payal’s old profit share was \(5/8\). Since the sacrifice ratio is 3:1, Payal sacrifices \(1/4\) of Riya’s \(1/8\) share, i.e. \(1/8 \times 1/4 = 1/32\). Therefore, Payal’s new share is \(5/8 - 1/32 = 20/32 - 1/32 = 19/32\). Option B is only Payal’s old share and does not account for the sacrifice. Exam tip: For each old partner, individual sacrifice equals the incoming partner’s share multiplied by that partner’s proportion in the sacrifice ratio.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrifice RatioPartnership AccountsClass 12 AccountancyReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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