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If the retiring partner’s profit-sharing share is \(\frac{2}{9}\) and the two remaining partners acquire it equally, what additional share will each remaining partner receive?

Answer and explanation

Correct answer: \(\frac{1}{9}\)

The retiring partner’s share is \(\frac{2}{9}\). Dividing it equally between two remaining partners gives each an additional share of \(\frac{2}{9} \div 2 = \frac{1}{9}\). The full \(\frac{2}{9}\) is the combined gain of both partners, not the gain of each one, so option B is incorrect. Exam tip: Divide the retiring partner’s share by the number of partners who acquire it equally.

Related tags

Retirement Of PartnerNew RatioEqual GainFraction CalculationNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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