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The old ratio is 5:5:2. A new partner takes a 1/4 share equally from the two partners having equal old shares. What is the new ratio?

Answer and explanation

Correct answer: 7:7:4:6

The relevant principle is equal sacrifice: when the incoming partner’s share is taken equally from two old partners, each sacrifices half of that share. The old ratio 5:5:2 totals 12, so the first two partners each have 5/12 and the third has 2/12. The new partner receives 1/4, and each of the first two sacrifices 1/8. Thus each retained share is 5/12 − 1/8. With denominator 24, this is 10/24 − 3/24 = 7/24. The third partner is unaffected and retains 2/12 = 4/24. The new partner receives 1/4 = 6/24. Hence the new ratio is 7:7:4:6, option A. Option B ignores sacrifice, while C is not the resulting ratio and D changes the third partner incorrectly.

Related tags

Equal-SacrificeNew-RatioAdmission-Of-PartnerNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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