Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

A and B share profits in the ratio of 3 : 2. They agreed to admit C on the condition that A will sacrifice 3/25th of his share of profit in favour of C and B will sacrifice 1/25th of his profits in favour of C. The new profit sharing ratio will be :

Options:

12:09:04

03:02:04

66:48:11

48:66:11

Correct Answer:

66:48:11

Explanation:

A's sacrifice = 3/5 x 3/25
                   = 9/125
B's sacrifice = 2/5 x 1/25
                   = 2/125
C's share = 9/125 + 2/125
                = 11/125
New Share of A = 3/5 - 9/125
                         = (75 -9)/125
                         = 66/125
New Share of B = 2/5 - 2/125
                         = (50-2)/125
                         = 48/125
NEW PROFIT SHARING RATIO IS 66/125 : 48/125 : 11/125
                                             = 66: 48: 11