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A and B share profits in the ratio 17:8. C is admitted for a 1/5 share of the total profits. A and B sacrifice this share in the ratio 3:1. What will be B's new profit share?

Answer and explanation

Correct answer: 27/100

B's sacrifice is 1/5 × 1/4 = 1/20, because B contributes one-fourth of the total sacrifice under the 3:1 sacrifice ratio. B's old share was 8/25. Therefore, B's new share = 8/25 − 1/20 = 32/100 − 5/100 = 27/100. Option 8/25 is the old share and does not account for B's sacrifice. Exam tip: first divide the incoming partner's share according to the sacrifice ratio, then subtract each partner's sacrifice from the old share.

Related tags

AccountancyPartner-AdmissionNew-Profit-Sharing-RatioSacrifice-RatioNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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