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A, B and C share profits in the ratio 2:6:2. B retires, and A and C acquire B's share equally. What will be the new ratio?

Answer and explanation

Correct answer: 1:1

The total of the old ratio is 10 parts. A has 2/10, B has 6/10, and C has 2/10. When B retires, his 6/10 share is acquired equally by A and C, so each receives 3/10. A's new share becomes 2/10 + 3/10 = 5/10, and C's new share also becomes 2/10 + 3/10 = 5/10. Thus their new ratio is 5:5, which reduces to 1:1. Options B, C, and D are equivalent-looking unreduced ratios, but in an MCQ asking for the ratio in simplest form, option A is the proper answer. The calculation also confirms that all profits are still allocated: 5/10 + 5/10 = 1.

Related tags

Equal AcquisitionRetirementNew RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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