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A and B share profits in the ratio 8:3. C is admitted for a 2/11 share of profits, and A and B will share the remaining profit in the ratio 5:4. What is B’s gain or sacrifice?

Answer and explanation

Correct answer: Gain 1/11

After C receives 2/11, the remaining profit for A and B is 9/11. Under the new ratio 5:4, B’s new share is \(\frac{4}{9} \times \frac{9}{11}=\frac{4}{11}\). B’s old share was \(\frac{3}{11}\), so gain = new share − old share = \(\frac{4}{11}-\frac{3}{11}=\frac{1}{11}\). Therefore, B gains 1/11. Exam tip: For a gain, subtract the old share from the new share; for a sacrifice, subtract the new share from the old share.

Related tags

Admission Of PartnerNew Profit Sharing RatioGain And SacrificeAccountancy Class 12Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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