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 the original ratio of A & C:

Options:

1:2

2:1

3:1

4:1

Correct Answer:

2:1

Explanation:

B share= 3/9
A & C takes this share in 4:2 means A gets= 3/9*4/6= 2/9 and C gets= 3/9*2/6=1/9
A new share= 2/9+4/9= 6/9
C new share= 1/9+2/9= 3/9
So, new ratio is 2:1