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A, B and C share profits in the ratio 2:1:7. After C retires, the new profit-sharing ratio of A and B is 3:2. What will be A’s new share of profit?

Answer and explanation

Correct answer: 3/5

After C’s retirement, A and B share profits in the new ratio 3:2. The total parts are 3 + 2 = 5, and A has 3 parts. Therefore, A’s new share is 3/5. The old ratio is not required because the new ratio is given directly. Exam tip: Divide a partner’s ratio part by the sum of all the new ratio parts to find the partner’s share.

Related tags

New RatioRetirement Of PartnerProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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