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Question
A, B and C are three partners sharing profit and loss in the ratio of 3:2:1. B retires from the firm. Suppose A and C purchase the share of retiring partners equally. What is the new profit sharing ratio?
Options
2 : 2
2 : 5
1 : 5
2 : 1
MCQ
Solution
2 : 1
Explanation:
B's ratio = `2/6`
A and C take this share in 1 : 1
A will get = `2/6 xx 1/2 = 2/12`
A's new share = `1/6 + 2/12 = 4/12`
C will get = `2/6 xx 1/2 = 2/12`
C's new share = `1/6 + 2/12 = 4/12`
New Profit Sharing Ratop of A and C
`= 8/12 : 4/12 = 2 : 1`
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Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio
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