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A, B and C share profits in the ratio 3:3:2. A retires, and B and C acquire A’s share equally. What is the new ratio?

Answer and explanation

Correct answer: 9:7

The governing concept is the new profit-sharing ratio after retirement. The old total is 3+3+2=8, so A’s retiring share is 3/8. B and C acquire this share equally; therefore each receives 3/16. B’s original share is 3/8=6/16, so B’s new share becomes 6/16+3/16=9/16. C’s original share is 2/8=4/16, so C’s new share becomes 4/16+3/16=7/16. Removing the common denominator gives the new ratio 9:7, so option A is correct. Equal acquisition refers only to the additional share received, not to the final shares. Thus options B, C and D fail to add A’s share correctly.

Related tags

RetirementNew RatioEqual GainAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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