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A, B and C share profits in the ratio 11:4:5. When B retires, if A and C continue to share profits in their old mutual ratio, what will be their new profit-sharing ratio?

Answer and explanation

Correct answer: 11:5

After B retires, only A and C remain as partners. Since they continue to share profits in their old mutual ratio, the new ratio of A:C remains equal to their original shares, 11:5. In 4:5, the share of B has been incorrectly used for A. Exam tip: When the remaining partners continue in their old mutual ratio, retain only the ratio terms belonging to those partners who continue.

Related tags

New RatioPartner RetirementProfit Sharing RatioAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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