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A, B and C share profits in the ratio 13:5:7. B retires. If A and C continue to share profits between themselves in their old ratio, what will be the new profit-sharing ratio of A and C?

Answer and explanation

Correct answer: 13:7

After B retires, only A and C will share the profits. Their old relative shares were 13 for A and 7 for C, so their new ratio remains 13:7. The ratio 13:5 is incorrect because it includes B’s old share. Exam tip: when the continuing partners retain their old relative ratio, use the corresponding terms of their original ratio directly as the new ratio.

Related tags

New RatioPartner RetirementProfit Sharing RatioReconstitution Of PartnershipNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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