Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

A and B are partners in a firm sharing profit in 4 : 1 ratio. They admitted "C" as a new partner for 25% share in the profit, which he acquired wholly from A. Determine the new profit sharing ratio.

Options:

11 : 4 : 5

4 : 1 : 1

3 : 1: 1

8 : 1 : 1

Correct Answer:

11 : 4 : 5

Explanation:

The correct answer is option 1- 11 : 4 : 5.

Old ratio = 4:1
C admits with 25% share i.e. 1/4

A sacrifice = 1/4
A's new share = 4/5 - 1/4
                     = (16-5)/20
                     = 11/20

B's new share = old share = 1/5

C's new share = 1/4

New ratio = 11/20 : 1/5 :1/4
              = 11/20 : 4/20 : 5/20
              = 11:4:5