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A, B and C share profits in the ratio 12:8:10. A dies. If B and C continue to share profits between themselves in their old ratio, what will be their new profit-sharing ratio?

Answer and explanation

Correct answer: 4:5

After A’s death, only B and C will share the profits. Their existing mutual ratio is 8:10, which simplifies to 4:5 after dividing both terms by 2. Therefore, option A is correct. In an examination, always express the ratio in its simplest form; 8:10 is equivalent but not the simplest form.

Related tags

Partner DeathNew RatioProfit Sharing RatioRatio SimplificationPartnership AccountingNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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