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After the retirement or death of a partner, the new ratio of the remaining partners is 44:31. What will be the new profit-sharing fractions of the first and second remaining partners, respectively?

Answer and explanation

Correct answer: 44/75 and 31/75

The sum of the terms of the new ratio is 44 + 31 = 75. Hence, the first partner’s new share is 44/75 and the second partner’s new share is 31/75. Option B incorrectly treats the ratio terms as fractions of each other, while option C reverses the partners’ shares. Exam tip: To convert a ratio into individual shares, divide each ratio term by the sum of all ratio terms.

Related tags

New RatioProfit Sharing RatioRatio To FractionPartner RetirementPartnership AccountingNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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