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A, B and C share profits in the ratio 7:2:1. On A’s retirement, B and C acquire A’s share in the ratio 4:3. What will be the new profit-sharing ratio of B and C?

Answer and explanation

Correct answer: 3:2

A’s share is 7/10 of the profits. B and C divide that share in the ratio 4:3, so B gains 4/10 and C gains 3/10. Their new shares are therefore B: 2/10 + 4/10 = 6/10 and C: 1/10 + 3/10 = 4/10. Simplifying 6:4 gives the new ratio 3:2.

Related tags

Retirement Of PartnerNew Profit-Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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