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A, B and C share profits in the ratio 5:4:1. C retires, and the new profit-sharing ratio of A and B becomes 3:2. What will be A’s share of profit in the new ratio?

Answer and explanation

Correct answer: 3/5

After C’s retirement, A and B share profits in the new ratio 3:2. The total of the ratio is 3+2=5, so A’s share is 3/5. The old ratio 5:4:1 is not needed because the new ratio is already given. Exam tip: To find a partner’s share from a ratio, divide that partner’s ratio number by the sum of all ratio numbers.

Related tags

New RatioPartner RetirementProfit Sharing RatioPartner ShareAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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