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Choose the correct answer. A and B share profits in the ratio 1:5. C is admitted for a 1/3 share, and A and B sacrifice equally. What is B’s new share?

Answer and explanation

Correct answer: 2/3

Answer: option A, 2/3. The incoming partner C receives 1/3 of the total profit. Since A and B sacrifice equally, the total sacrifice of 1/3 is divided equally between them; each sacrifices 1/6. Before admission, B’s share from the ratio 1:5 was 5/(1+5)=5/6. Subtracting B’s sacrifice gives B’s new share=5/6−1/6=4/6=2/3. Therefore A is correct. Option C, 5/6, is B’s old share before C entered. Option D, 1/3, is C’s share. Option B, 1/2, does not follow from either the old ratio or the equal-sacrifice condition. A check confirms the result: A’s old share was 1/6 and he sacrifices 1/6, so A receives zero; B receives 2/3 and C receives 1/3. These shares total 1.

Related tags

AdmissionEqual-SacrificeNew-ShareNew-Profit-Sharing-RatioAccountancyNew Profit Sharing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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