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A and B share profits in the ratio 7:2. C is admitted for a 1/9 share, which is taken entirely from A’s share. What will be the new mutual profit-sharing ratio of A and B?

Answer and explanation

Correct answer: 3:1

In the original ratio 7:2, the total is 9 parts, so A’s share is 7/9 and B’s share is 2/9. Since C’s 1/9 share is taken entirely from A, A’s new share becomes 7/9 − 1/9 = 6/9, while B’s share remains 2/9. Therefore, A and B’s new mutual ratio is 6:2 = 3:1. The ratio 7:2 is the old ratio, not the new one. Exam tip: Reduce the share only of the partner who sacrifices the share for the incoming partner.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrifice RatioAccountancy Class 12Partnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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