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JAMB Principles of Accounts 2001 Question 34

Question 34

Partnership Admission, Retirement and Dissolution

Marhumu and Yusuf are in partnership sharing profits and losses in the ratio of 2:1. On 31/3/2000, the partnership decided to admit Idris who is to take ¼ of future profits without changing the ratio of Marhumu and Yusuf. What is the new profit-sharing ratio of Marhumu and Yusuf?

  1. A.50% : 25%
  2. B.50% : 20%
  3. C.25% : 50%
  4. D.25% : 25%.
Show the answer and explanation

Answer: A (50% : 25%)

Explanation

¾ remains for the old partners in 2:1: Marhumu ⅔ × ¾ = 50%, Yusuf ⅓ × ¾ = 25%.