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A, B and C share profits in the ratio 10:6:9. A dies. If B and C continue to share profits in their old mutual ratio, what will be their new profit-sharing ratio?

Answer and explanation

Correct answer: 2:3

After A’s death, the old mutual ratio of B and C remains 6:9. Dividing both terms by their highest common factor, 3, gives 6:9 = 2:3. Therefore, the new profit-sharing ratio is 2:3. Exam tip: When partners continue in their old mutual ratio, retain their original relative shares and reduce the ratio to its simplest form. Option 6:9 is not simplified, while 3:2 reverses the partners’ order.

Related tags

Partner DeathOld Mutual RatioNew Profit Sharing RatioRatio SimplificationNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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