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A and B share profits in the ratio 9:1. C receives a 1/5 share, and A and B sacrifice equally. What will be B’s new share?

Answer and explanation

Correct answer: Zero

The governing rule is equal sacrifice: when the incoming partner’s share is surrendered equally by the old partners, each old partner sacrifices half of the incoming share. C receives 1/5, so A and B each sacrifice (1/5) × (1/2) = 1/10. Under the old ratio 9:1, B’s old share was 1/(9+1) = 1/10. Therefore B’s new share is old share minus sacrifice: 1/10 − 1/10 = 0. Hence option A, Zero, is correct. Option B is B’s old share before admission, not the remaining share. Option C is C’s share, while option D does not follow from equal sacrifice and does not reconcile with the transferred 1/5.

Related tags

Equal SacrificeAdmissionNew ShareNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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