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A, B and C share profits in the ratio 9:4:2. C retires, and A and B maintain a new ratio of 3:2. Whose share has decreased?

Answer and explanation

Correct answer: None

To determine a decrease, compare each continuing partner’s old share with the new share. The old total is 15, so A had 9/15 = 3/5 and B had 4/15. The new ratio 3:2 has total 5, so A’s new share is 3/5 and B’s new share is 2/5 = 6/15. Thus A’s share remains exactly 3/5; it has neither increased nor decreased. B’s share changes from 4/15 to 6/15, so B gains 2/15. C’s retirement share is absorbed by B. Therefore nobody’s share has decreased, making option D correct. Option A is tempting only if the old and new forms of A’s share are not simplified properly.

Related tags

Share ComparisonRetirementNew RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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