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A, B, C and D share profits in the ratio 6:4:3:2. When A retires, B, C and D acquire A’s share equally. What will be the new profit-sharing ratio?

Answer and explanation

Correct answer: 6:5:4

A’s share is 6 out of the total 15 parts. This share is divided equally among B, C and D, so each receives 2 parts. Therefore, the new ratio is B:C:D = (4+2):(3+2):(2+2) = 6:5:4. Exam tip: add the acquired share to each gaining partner’s old share.

Related tags

Partner RetirementNew Profit Sharing RatioEqual AcquisitionPartnership AccountsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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