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A, B and C share profits in the ratio 8:2:5. After C retires, the new profit-sharing ratio of A and B is 3:2. Whose share among A and B has decreased?

Answer and explanation

Correct answer: Neither

Before C’s retirement, A’s share was \(8/15\) and B’s share was \(2/15\). Under the new ratio 3:2, A’s share is \(3/5=9/15\) and B’s share is \(2/5=6/15\). Thus, both A and B have gained, so neither partner’s share has decreased. C’s share becomes nil after retirement, but the question asks only about A and B. Exam tip: Convert the old and new ratios to a common denominator before comparing the shares.

Related tags

New RatioRetirement Of PartnerProfit Sharing RatioShare ComparisonNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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