Skip to content

CA Foundation · Accounting · Partnership and LLP Accounts

A and B share profits in the ratio 3:2. They admit C for a 1/5th share, which he gets 3/20 from A and 1/20 from B. What is the new profit-sharing ratio of A, B and C?

The new ratio is 9:7:4. A's share falls from 12/20 to 9/20 after sacrificing 3/20, B's falls from 8/20 to 7/20 after sacrificing 1/20, and C gets the 4/20 sacrificed together by A and B. The total of 20 confirms it.

  1. A9:7:4Correct
  2. B9:8:3
  3. C12:8:5
  4. D8:7:5

Explanation

A's old share is 3/5 = 12/20, B's is 2/5 = 8/20. A's new share = 12/20 - 3/20 = 9/20. B's new share = 8/20 - 1/20 = 7/20. C gets 3/20 + 1/20 = 4/20. The ratio is 9:7:4. Check: 9+7+4 = 20.

Did you get it right without looking?

One question tells you little. A timed set on Partnership and LLP Accounts shows your real accuracy, how long you take and where you lose marks.

Practise Partnership and LLP AccountsFree diagnostic mock

More Partnership and LLP Accounts questions