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Question
A, B, C and D are partners sharing profits in the ratio of 5 : 3 : 1 : 2. Calculate the new profit sharing ratio if B and C retire from the firm.
Numerical
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Solution
Old profit-sharing ratio:
A : B : C : D = 5 : 3 : 1 : 2
Since B and C retire, A and D continue with their existing shares.
A : D = 5 : 2
New profit-sharing ratio = 5 : 2
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Chapter 4: Retirement or Death of a Partner - PRACTICAL QUESTIONS [Page 4.102]
