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A, B and C share profits in the ratio 9:3:3. A dies, and no new agreement is made. What will be the new profit-sharing ratio of B and C?

Answer and explanation

Correct answer: 1:1

In the absence of a new agreement, the surviving partners, B and C, continue to share profits in their old relative ratio. Their old ratio was 3:3, which simplifies to 1:1. Therefore, option A is correct. Exam tip: When a partner retires or dies and there is no new agreement, the surviving partners retain their old mutual ratio.

Related tags

Partnership AccountsDeath Of PartnerNew RatioProfit Sharing RatioReconstitutionNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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