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A, B and C share profits in the ratio 9:4:2. When C retires, A and B acquire C’s share in the ratio 1:1. What will be the new profit-sharing ratio of A and B?

Answer and explanation

Correct answer: 2:1

C’s share is 2 out of the total 15 parts. Since A and B acquire it equally, each receives 1 additional part. Thus, A’s new share is 9 + 1 = 10 and B’s is 4 + 1 = 5. Therefore, the new ratio is 10:5 = 2:1. In exams, always express the final ratio in its simplest form.

Related tags

New Profit Sharing RatioPartner RetirementGoodwill AdjustmentRatio SimplificationNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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