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A, B and C share profits in the ratio 1:5:4. After A retires, the new profit-sharing ratio of B and C becomes 7:5. What will be B’s new share of profit?

Answer and explanation

Correct answer: 7/12

After A’s retirement, B and C share the profits in the new ratio 7:5. The total parts are 7+5=12, so B’s share is 7/12 of the total profit. Option B, 5/12, is C’s share, while 7:5 is the ratio itself, not B’s fractional share. Exam tip: Divide a partner’s ratio part by the sum of all parts in the new ratio.

Related tags

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

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