A and B are partners in a business sharing profits and losses in the ratio of 7:3 respectively. They admit C as a new partner. A sacrificed 1/7 th share of his profit and B sacrificed 1/3 rd of his share in favour of C.
CS CSEET · Business Economics & Fundamentals of Accounting and Auditing · PYQS · June 2013
A and B are partners in a business sharing profits and losses in the ratio of 7:3 respectively. They admit C as a new partner. A sacrificed 1/7 th share of his profit and B sacrificed 1/3 rd of his share in favour of C. The new profit sharing ratio of A, B, and C will be —
Answer & Explanation:
Correct Answer: Option (A)
Correct answer: (A) 3:1:1. A retains 0.7×6/7 = 0.6; B retains 0.3×2/3 = 0.2; C receives 0.2. The ratio is 3:1:1.
Topics: Fundamentals of Accounting
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