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A, B and C share profits in the ratio 2:6:2. C dies, and A and B acquire C’s share in the ratio 1:3. What is the new profit-sharing ratio of A and B?

Answer and explanation

Correct answer: 1:3

C’s share is 2/10. A and B acquire it in the ratio 1:3, so A gains 1/20 and B gains 3/20. Their new shares are 2/10 + 1/20 = 5/20 for A and 6/10 + 3/20 = 15/20 for B. Thus, the new ratio is 5:15, or 1:3 in simplest form.

Related tags

Retirement Or DeathNew Profit-Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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