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A and B share profits in the ratio 17:8. They decide to admit C for a \(1/5\) share of the total profits. If A and B sacrifice in the ratio 3:1, what will be the new profit-sharing ratio after C’s admission?

Answer and explanation

Correct answer: A : B : C = 53 : 27 : 20

C’s share is \(1/5\), and the sacrificing ratio is 3:1. Therefore, A sacrifices \(3/20\) and B sacrifices \(1/20\). A’s new share is \(17/25-3/20=53/100\), while B’s new share is \(8/25-1/20=27/100\). C’s share is \(1/5=20/100\). Hence, the new ratio is \(53:27:20\). Exam tip: first distribute the incoming partner’s share according to the sacrificing ratio, then subtract each sacrifice from the corresponding old share.

Related tags

Admission Of PartnerNew Profit Sharing RatioSacrificing RatioPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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