The correct answer is Option (2) → 4 : 1
On the death of a partner, the remaining partners take over his share in their old ratio unless they agree otherwise. So B and C continue in the ratio in which they already share between themselves.
B : C = 1/2 : 1/8
= 4/8 : 1/8
= 4 : 1
NCERT (2026-27 edition):
New Profit Sharing Ratio – “… (a) normally, the continuing partners acquire the share of retiring or deceased partners in the old profit sharing ratio, and there is no need to compute the new profit sharing ratio among them, as it will be same as the old profit sharing ratio among them. In fact, 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. For example, Asha, Deepti and Nisha are partners in a firm sharing profits and losses in the ratio of 3:2:1. If Deepti retires, the new profit sharing ratio between Asha and Nisha will be 3:1, unless they decide otherwise.” |
