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A and B share profits in the ratio 5:3. C is admitted for a 1/8 share of profits, which is sacrificed equally by A and B. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: A : B : C = 9 : 5 : 2

Express the old ratio 5:3 with denominator 16: A's share is 10/16 and B's share is 6/16. C receives 1/8 = 2/16. Since A and B sacrifice this share equally, each sacrifices 1/16. Therefore, A's new share is 10/16 − 1/16 = 9/16, B's is 6/16 − 1/16 = 5/16, and C's is 2/16. Hence, the new ratio is 9:5:2. Exam tip: The total sacrifice by the old partners equals the new partner's share; when sacrifice is equal, divide it equally among them.

Related tags

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

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