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The old profit-sharing ratio of A, B and C is 4:2:4. C retires, and the new profit-sharing ratio of A and B is fixed at 3:2. What will be A's new share of profit?

Answer and explanation

Correct answer: \(\frac{3}{5}\)

After C retires, only A and B share the profit. In the new ratio 3:2, the total parts are 3+2=5, so A's new share is \(\frac{3}{5}\). Option B, \(\frac{2}{5}\), represents B's share. Exam tip: To find a partner's share from a ratio, divide that partner's ratio part by the sum of all ratio parts.

Related tags

Partner RetirementNew Profit Sharing RatioPartner ShareAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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