CSEET · Fundamentals of Accounting · Partnership and LLP Accounts
A and B share profits in the ratio 3:2. They admit C as a new partner for a 1/5 share, which C acquires from A and B in their existing ratio. What is the new profit-sharing ratio of A, B and C?
The new ratio is 12:8:5. C takes 1/5, leaving 4/5 for A and B, divided 3:2. A gets 12/25, B gets 8/25 and C gets 5/25, which gives 12:8:5.
- A3:2:1
- B12:8:5Correct
- C8:12:5
- D15:10:5
Explanation
C gets 1/5, so A and B share 4/5 in the ratio 3:2. A = 4/5 x 3/5 = 12/25 and B = 4/5 x 2/5 = 8/25, while C = 1/5 = 5/25. The ratio is 12:8:5. The option 15:10:5 is wrong because it adds to 30 and gives C 1/6, not 1/5.
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