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

Answer and explanation

Correct answer: 4:1

B’s original share is 3 parts. A and C acquire this share in the ratio 2:1, so A receives 2 parts and C receives 1 part. Therefore, A’s new share is 6+2=8 and C’s new share is 1+1=2. Hence, the new ratio of A:C is 8:2, which simplifies to 4:1. Exam tip: Add the deceased partner’s share to the gaining partners in their gain ratio, then simplify the resulting ratio.

Related tags

Partnership AccountsRetirement And DeathNew RatioGain RatioProfit SharingNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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