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A and B share profits in the ratio 3:5. C is admitted for a 1/8 share of profits, and B’s new share becomes 1/2. From which existing partner’s sacrifice is C’s share obtained?

Answer and explanation

Correct answer: Only B

Before C’s admission, A’s share was 3/8 and B’s share was 5/8. After admission, B’s share becomes 1/2, or 4/8, so B sacrifices 1/8. Since the total of the new shares is 1, A’s share remains 3/8; therefore, C’s 1/8 share comes entirely from B. Exam tip: Compare each existing partner’s old and new share to identify the sacrificing partner.

Related tags

AccountancyPartner AdmissionProfit Sharing RatioSacrificing RatioPartnership FundamentalsNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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