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A, B and C share profits in the ratio 6:4:5. B dies, and no new agreement is made. What will be the new profit-sharing ratio of A and C?

Answer and explanation

Correct answer: 6:5

In the absence of a new agreement, the continuing partners share profits in their old ratio. Therefore, after B’s death, A and C will share profits in the ratio of their old shares, 6:5. The ratio 4:5 is the old ratio of B and C, not the new ratio of the continuing partners. Exam tip: When a partner retires or dies and no new agreement is made, use the old ratio of the remaining partners.

Related tags

New RatioDeath Of PartnerPartnership AccountingProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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