Question

A, B and C are equal partners. C retires. He surrenders 3/5th of his share in favour of A and 2/5th in favour of B. New ratio will be ______.

Options

• 3 : 2

• 8 : 7

• 7 : 8

• 2 : 3

Answer 1

A, B and C are equal partners. C retires. He surrenders 3/5th of his share in favour of A and 2/5th in favour of B. New ratio will be 8 : 7.

Explanation:

Old profit sharing ratio of A, B, C = 1 : 1 : 1

C retires = `1/3`

C Surrender `3/5`th of his share to A and `2/5`th to B

A gains from C = `1/3xx3/5=3/15`

B gains from C = `1/3xx2/5=2/15` 

New PSR = Old ratio + Gain

A = `1/3+3/15=(5+3)/15=8/15`

B = `1/3+2/15=(5+2)/15=7/15`

New PSR of A & B = `8/15:7/15`

= 8 : 7