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A and B share profits in the ratio 4:1. If A dies, what will be A’s share in the profit earned up to the date of death?

Answer and explanation

Correct answer: 4/5

In the profit-sharing ratio 4:1, the total number of parts is 4 + 1 = 5. A is entitled to 4 parts, so A’s share of the profit earned up to the date of death is \(4/5\). B’s share is \(1/5\), not A’s share. Exam tip: Divide the partner’s ratio by the sum of all partners’ ratios to find that partner’s fraction of profit.

Related tags

AccountancyPartnership AccountsRetirement Or DeathDeceased Partner ShareProfit Sharing RatioDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A Partner

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