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A and B share profits in the ratio 11 : 9. C is admitted for a \(1/4\) share of the total profits. A and B sacrifice C’s share equally. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 17 : 13 : 10

The old shares of A and B are \(11/20\) and \(9/20\), respectively. C receives \(1/4\) of the total profit. Since A and B sacrifice this share equally, each sacrifices \(1/8\). Therefore, A’s new share is \(11/20 - 1/8 = 17/40\), B’s new share is \(9/20 - 1/8 = 13/40\), and C’s share is \(1/4 = 10/40\). Hence, the new ratio is \(17 : 13 : 10\). Exam tip: Under equal sacrifice, subtract half of the incoming partner’s share from each existing partner’s share.

Related tags

Admission Of PartnerNew Profit Sharing RatioEqual SacrificePartnership AccountsAccountancy Class 12Reconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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