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Difficulty: EasyAdmission of a New Partner

Ade and Ola are partners sharing profits and losses in the ratio of 3:23:2. They admit Musa into the partnership, giving him a 15\frac{1}{5} share of the future profits. If Ade and Ola share the remaining profits in their original ratio, what is Ade's new share of profits?

  1. 1225\frac{12}{25}Answer
  2. B
    35\frac{3}{5}
  3. C
    45\frac{4}{5}
  4. D
    825\frac{8}{25}

Answer

Ade's new profit share is 1225\frac{12}{25}.
When a new partner is admitted with a specified share of profits, the total profit of 1 is reduced by the incoming partner's share to determine the remaining profit (1−15=451 - \frac{1}{5} = \frac{4}{5}). Multiplying Ade's original proportion of 35\frac{3}{5} by the remaining share of 45\frac{4}{5} yields 1225\frac{12}{25}.

Step-by-Step Solution

1
Calculate the remaining profit share after deducting the new partner's share.
Total profit share is 11. Musa gets 15\frac{1}{5}, so remaining share = 1−15=451 - \frac{1}{5} = \frac{4}{5}.
The incoming partner's agreed fraction must be subtracted from the total firm profit of 1.
2
Multiply Ade's original profit-sharing fraction by the remaining profit share.
Ade's new share = 35×45=1225\frac{3}{5} \times \frac{4}{5} = \frac{12}{25}.
Ade retains three-fifths of whatever profit remains after allocating Musa's portion.

Key Concept

Calculation of new profit sharing ratio upon admission of a new partner
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Admission of a New Partner

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