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Question
A, B & C partners sharing profits & losses in the ratio of 4:3:2. B decided to retire from the firm. Calculate the new profit sharing ratio of A & C if B gives his share to A & C in equal proportion.
A, B & C partners sharing profits & losses in the ratio of 4:3:2. B decided to retire from the firm. Calculate the new profit sharing ratio of A & C if B gives his share to A & C in equal proportion.
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Solution
The correct option is C 11:7
Old ratio ( A,B and C) = 4 : 3 : 2B's share of profit = 3/9 Share of B taken by A = (3/9) * (1/2) = 1/6Share of B taken by C = (3/9) * (1/2) = 1/6
New ratio = Old ratio + share taken from BA's new share = (4/9) + (1/6) = 11/18C's new share = (2/9) + (1/6) = 7/18Therefore, new share of A and C = 11 : 7
Old ratio ( A,B and C) = 4 : 3 : 2
B's share of profit = 3/9
Share of B taken by A = (3/9) * (1/2) = 1/6
Share of B taken by C = (3/9) * (1/2) = 1/6
New ratio = Old ratio + share taken from B
A's new share = (4/9) + (1/6) = 11/18
C's new share = (2/9) + (1/6) = 7/18
Therefore, new share of A and C = 11 : 7
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