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A and B are in partnership sharing profits and losses in die ratio of 3: 2. They admit C into partnership with l / 5th share which he acquires equally from A and B. Accountant has calculated new profit-sharing ratio as 5: 3: 2. Is accountant correct? (C.B.SE Sample Paper 2020)

SOLUTION

Yes, the accountant is correct
Working: c’s Share acquired from A and B each = 1 / 5 x 1 / 2 = 1 / 10
A’s Share = 3 / 5 – 1 / 10 = 5 / 10
B’s share = 2 / 5 – 1 / 10 = 3 / 10

New Profit-Sharing Ratio of A: B: C is 5: 3: 2







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