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A, B and C share profits in the ratio 2:3:5. After C retires, the new profit-sharing ratio of A and B is 5:3. What will be A's new share of profit?

Answer and explanation

Correct answer: \(\frac{5}{8}\)

After C retires, A and B share profits in the new ratio 5:3. The total parts are \(5+3=8\), so A's new share is \(\frac{5}{8}\). The old ratio is not needed because the new ratio is given directly. Exam tip: Find a partner's fraction by dividing that partner's new ratio term by the sum of all terms 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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