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A, B and C share profits in the ratio 4:2:4. B retires, and A and C acquire B’s share in the ratio 3:1. What will be the new ratio of A and C?

Answer and explanation

Correct answer: 11:9

The governing rule is to add each partner’s acquired portion of the retiring partner’s share to that partner’s old share. The total old ratio is 4 + 2 + 4 = 10, so B’s share is 2/10 = 1/5. A and C acquire this 1/5 share in the ratio 3:1. A receives 3/4 × 1/5 = 3/20, while C receives 1/4 × 1/5 = 1/20. A’s new share is 4/10 + 3/20 = 8/20 + 3/20 = 11/20. C’s new share is 4/10 + 1/20 = 8/20 + 1/20 = 9/20. Therefore, the new ratio is 11:9, making option A correct. Other choices confuse the old, acquisition, or an incorrectly calculated ratio.

Related tags

RetirementNew RatioAcquisition RatioAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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