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A and B share profits in the ratio 13:7. C is admitted for a \(1/4\) share of the firm's profits. If A and B sacrifice in the ratio 3:2, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: A : B : C = 10 : 5 : 5

C's share is \(1/4=5/20\). Since A and B sacrifice in the ratio 3:2, A sacrifices \(3/20\) and B sacrifices \(2/20\). Thus, A's new share is \(13/20-3/20=10/20\), B's is \(7/20-2/20=5/20\), and C's share is \(5/20\). Therefore, the new ratio is \(10:5:5\), or \(2:1:1\) in simplest form. Exam tip: Distribute the incoming partner's share among the old partners according to the sacrificing ratio and subtract those amounts from their old shares.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrificing RatioPartnership AccountsClass 12Reconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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