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A, B and C share profits in the ratio 3:5:2. D is admitted as a new partner for a 1/10 share of the profit. D’s share is acquired equally from A and C only. What is the new profit-sharing ratio of A, B, C and D?

Answer and explanation

Correct answer: New ratio of A, B, C and D: 5:10:3:2

D’s 1/10 share is taken equally from A and C, so each sacrifices 1/20. The original shares are A = 6/20, B = 10/20 and C = 4/20. After the sacrifice, their shares are A = 5/20, B = 10/20 and C = 3/20; D receives 2/20. Therefore, the new profit-sharing ratio is 5:10:3:2.

Related tags

AccountancyNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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