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Question
A, B, and C are partners in the firm sharing profits in the ratio of 3 : 2 : 1. B retired and his share was divided equally between A and C. Calculate the new profit sharing ratio of A and C.
A, B, and C are partners in the firm sharing profits in the ratio of 3 : 2 : 1. B retired and his share was divided equally between A and C. Calculate the new profit sharing ratio of A and C.
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Solution
The correct option is C 2:1
B’s Share = 2/6
B’s share is divided between A and C in the ratio of 1 : 1.
A gets 1/2 of 2/6 = 2/6 × 1/2 = 1/6
A’s New Share = 3/6 + 1/6 = 4/6
C’s gets 1/2 of 2/6 = 2/6 × 1/2 = 1/6
C’s New share = 1/6+1/6 = 2/6
New ratio = 2:1
2:1
B’s Share = 2/6
B’s share is divided between A and C in the ratio of 1 : 1.
A gets 1/2 of 2/6 = 2/6 × 1/2 = 1/6
A’s New Share = 3/6 + 1/6 = 4/6
C’s gets 1/2 of 2/6 = 2/6 × 1/2 = 1/6
C’s New share = 1/6+1/6 = 2/6
New ratio = 2:1
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