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If two old partners share profits in the ratio 3:4 and a new partner acquires a 2/7 share from them in their old ratio, what will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 15:20:14

The new partner’s 2/7 share is sacrificed by the old partners in the ratio 3:4. Their original shares are 3/7 and 4/7, while their sacrifices are 6/49 and 8/49 respectively. Thus, their new shares become 15/49 and 20/49. The new partner’s share is 2/7 = 14/49. Therefore, the new ratio is 15:20:14. Exam tip: Deduct the incoming partner’s share from the old partners in the old ratio before writing the new ratio.

Related tags

Old RatioSacrifice RatioNew Profit Sharing RatioAdmission Of PartnerPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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