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A, B and C share profits and losses in the ratio 6:2:2. When A retires, B and C acquire A’s share in the ratio 3:1. What will be the new profit-sharing ratio of B and C?

Answer and explanation

Correct answer: 13:7

A’s old share was \(6/10=3/5\). B acquires \(3/4\) of A’s share, i.e. \(9/20\), while C acquires \(1/4\), i.e. \(3/20\). Therefore, B’s new share is \(2/10+9/20=13/20\), and C’s new share is \(2/10+3/20=7/20\). Hence, the new ratio is \(13:7\). Exam tip: First calculate the retiring partner’s share, distribute it according to the gaining ratio, and then add the gains to the partners’ old shares.

Related tags

Retired PartnerNew RatioGaining RatioPartnership AccountsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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