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A, B and C share profits in the ratio 15:5:10. A retires, and B and C continue to share profits in their old mutual ratio. What will be the new profit-sharing ratio of B and C?

Answer and explanation

Correct answer: 1:2

After A retires, only B and C remain, and their old mutual ratio was 5:10. Dividing both terms by their highest common factor, 5, gives the simplified ratio 1:2. Therefore, option A is correct. Exam tip: when finding a new ratio, reduce the remaining partners’ mutual ratio to its simplest form.

Related tags

Partnership AccountsRetirement Of PartnerNew RatioProfit Sharing RatioSimplificationNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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