Reconstitution of Partnership Firm: Retirement and Death
Question:
A, B, C & D are partners sharing profits in the ratio of 2:1:2:1. C retires from the firm and the remaining partners decide to share future profits equally. What will be the gaining ratio?
Options:
2:1:0
3:1:0
0:1:1
2:1:0
Correct Answer:
0:1:1
Explanation:
Old ratio= 2:1:2:1 New ratio= 1:1:1 C retires means A gain= 1/3- 2/6= 0/6 = 0 means no gain B gain= 1/3-1/6= 1/6 D gain= 1/3-1/6= 1/6 So, B & D gain equally or 1:1