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A, B and C share profits in the ratio 5:3:2. After C retires, the new profit-sharing ratio of A and B is 7:3. What is B’s new share of profit?

Answer and explanation

Correct answer: 3/10

After retirement, the new ratio is A:B = 7:3. The total parts are 7 + 3 = 10, so B’s new share is 3/10. Option B represents A’s share, 7/10, not B’s share. Exam tip: To find a partner’s share from a new ratio, divide that partner’s ratio part by the sum of all ratio parts.

Related tags

New RatioRetirement Of PartnerProfit Sharing RatioPartner ShareReconstitutionNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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