Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

A, B and C are partners sharing profits in the ratio of 6 : 3 : 2. If C retires, the new profit sharing ratio between A and B will be:

Options:

7 : 4

2 : 1

1 : 1

1 : 2

Correct Answer:

2 : 1

Explanation:

The correct answer is Option (2) - 2 : 1.

Old ratio = 6:3:2 (A, B and C)
C retires.

In the absence of any information regarding profit sharing ratio in which the remaining partners acquire the share of retiring/deceased partner, it is assumed that they will acquire it in the old profit sharing ratio and so share the future profits in their old ratio.
So, old ratio of A & B = 6:3
New ratio is also same i.e. 6:3 or 2:1.