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The old profit-sharing ratio of two partners was 3:2, and after the admission of a new partner, the new ratio became 7:5:4. What is the new partner’s share of profit?

Answer and explanation

Correct answer: 4/16

In the new ratio 7:5:4, the new partner is represented by the third term, 4. The total parts are 7+5+4=16, so the new partner’s share is 4/16, or 1/4. The values 7/16 and 5/16 represent the shares of the first and second old partners, respectively. Exam tip: divide the new partner’s ratio part by the sum of all new-ratio parts; the old ratio is not needed for this direct calculation.

Related tags

Admission Of PartnerNew Profit Sharing RatioRatio CalculationPartner ShareReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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