Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

A, B & C are partners in a partnership firm sharing profits and losses in the ratio of 4:3:2. B decides to retire from the firm. Calculate the new profit sharing between the remaining partners in the following conditions-

If B gives his share to A & C in equal proportion:

Options:

11:10

7:11

11:7

10:11

Correct Answer:

11:7

Explanation:

B share is 3/9
A acquire= 3/9*1/2= 3/18
C acquire= 3/9*1/2= 3/18
A new share= 4/9+3/18= 11/18
C new share= 2/9+3/18= 7/18
So, new profit sharing ratio is 11:7