Accounting JAMB

Sule and Ahmad are in partnership sharing profits and losses equally. If Khadija is admitted as new partner to take 1/5 as her share. What is the new profit or loss sharing ratio?

A. Sule 1/3, Ahmad 1/3 and Khadija 1/3
B. Sule 1/5, Ahmad 15 and Khadija 3/5
C. Sule 2/5, Ahmad 2/5 and Khadija 1/5
D. Sule 2/5, Ahmad 1/5 and Khadija 2/5

Correct Answer:

Option C – Sule 2/5, Ahmad 2/5 and Khadija 1/5

Explanation

Recall that Sule and Ahmed have been sharing profit and losses equally. The admission of Khadija will only reduce the rate of losses and profits shared but will still be equally shared. The new sharing formula would be ;

2/5:2/5:1/5
2/5+2/5+1/5 = 5/5 = 1

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