Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

P, Q & R are partners in a partnership firm named RAWAT SOLUTIONS and sharing profits in the ratio of 4:3:1. Q retires and sold his share of profits to other partners for ₹8100. ₹3600 was paid by P and ₹4500 was paid by R. Profit of the year after Q's retirement is ₹10500.

What will be the new profit sharing ratio?

Options:

2:1

1:2

4:5

5:4

Correct Answer:

2:1

Explanation:

Old ratio is 4:3:1
As both partners gaining ratio is 4:5 means they acquire Q's share(3/8) in this ratio.
So, P acquires = 4/9 x 3/8 = 1/6
      R acquires = 5/9 x 3/8 = 5/24
New share = Old share + Acquired share
P's new share = 4/8 + 1/6
                       = (12 +4)/24
                       = 16/24 = 2/3
R's new share = 1/8 + 5/24
                       = (3 +5)/24
                       = 8/24 = 1/3
New ratio is 2/3 : 1/3
                  = 2:1