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A, B and C share profits in the ratio 3:7:5. A retires, and B and C acquire A's share equally. What will be the new ratio of B and C?

Answer and explanation

Correct answer: 17:13

The governing rule is that a retiring partner's share is added to the continuing partners in the stated gaining ratio. The old total is 3 + 7 + 5 = 15. A's retiring share is therefore 3/15. Since B and C acquire it equally, each receives half of 3/15, or 3/30. B's new share is 7/15 + 3/30 = 14/30 + 3/30 = 17/30. C's new share is 5/15 + 3/30 = 10/30 + 3/30 = 13/30. The common denominator cancels, giving the new ratio 17:13. The other options either retain the old ratio or divide the shares incorrectly. Hence option A is correct.

Related tags

RetirementNew RatioEqual AcquisitionNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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