Accountancy Part AReconstitution of Partnership Firm: Retirement and Death

If B gives his share to A & C in the ratio of 3:1.

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-

Answer & explanation

Correct answer: option 1

The correct answer is option 1- 25:11.

Old ratio 4:3:2
B share = 3/9 is taken by other in 3:1.
So A takes = 3/9 x 3/4
= 9/36
C takes = 3/9 x 1/4
= 3/36

A new share = 4/9 + 9/36
                     = (16+9)/36
                     = 25/36
C new share = 2/9 + 3/36
                     = (8+3)/36
                     = 11/36

So new ratio is 25/36:11/36 or 25:11