Read the following information and answer the question.
A, B & C are partners sharing profits in the ratio of 2:2:1. At the end of the year, the balance sheet shows the following information-
Capital accounts of partner- A ₹6,00,000, B ₹4,80,000 C ₹4,80,000
General reserve = ₹4,40,000
Workmen compensation reserve = ₹3,60,000
Creditors = ₹2,40,000
Land = ₹8,00,000
Building = ₹6,00,000
Furniture = ₹2,40,000
Debtors = ₹4,00,000(including ₹20,000 for provision)
Stock = ₹4,40,000
Cash = ₹1,40,000
What will be the new ratio between the remaining partners if C retires?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 1:1.
Old ratio= 2:2:1
Gaining ratio is not given. So old ratio becomes new ratio.
Old ratio between A & B = 2:2 or 1:1
So new ratio will be = 1:1